Court Opinion

ID: 6324448
Source: CourtListenerOpinion
Date Created: 2022-03-17 22:02:39.816505+00
Date Added: 2024-06-11T09:21:52.216058
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

THE STATE OF DELAWARE                           )
INSURANCE COVERAGE OFFICE,                      )
and FACTORY MUTUAL                              )
INSURANCE CO., both as subrogee                 )
of the University of Delaware,                  )
                                                )
                        Plaintiffs,             )
                   v.                           )      C.A. No. N19C-08-080 EMD CCLD
                                                )
DISABATINO CONSTRUCTION CO.,                    )
SCHLOSSER & ASSOCIATES                          )
MECHANICAL CONTRACTORS,                         )
INC., AND V.E. GUERRAZZI, INC.,                 )
                                                )
                        Defendants.             )

                                      Submitted: December 21, 2021
                                        Decided: March 17, 2022

        Upon Defendant DiSabatino Construction Co.’s Motion for Summary Judgment
                                      GRANTED

Upon Defendant Schlosser & Associates Mechanical Contactors’ Motion for Summary Judgment
                                       GRANTED

            Upon Defendant V.E. Guerrazzi, Inc.’s Motion for Summary Judgment
                                      GRANTED

Allison McCowan, Esq., Sarah Fruehauf, Esq., Zi-Xiang Shen, Esq., State of Delaware
Department of Justice, Wilmington, DE, Counsel for State of Delaware Insurance Coverage Office

Timothy Jay Houseal, Esq., Jennifer M. Kinkus, Esq., Young, Conaway, Stargatt & Taylor LLP,
Wilmington, DE, Counsel for Factory Mutual Insurance Company

Seth A. Niederman, Esq., Fox Rothschild LLP, Wilmington, DE, Counsel for DiSabatino
Construction Company

Michael J. Follet, Esq., Naulty, Scaricamazza & McDevitt, L.L.C., Wilmington, DE, Counsel for
Schlosser & Associates Mechanical Contractors

Kenneth M. Doss, Casarino Christmas Shalk Ransom & Doss, P.A., Wilmington, DE, Counsel for
V.E. Guerrazzi, Inc.

DAVIS, J.
                                    I.     INTRODUCTION

         This is a breach of contract and negligence action assigned to the Complex Commercial

Litigation Division of this Court. Plaintiffs State of Delaware Insurance Coverage Office and

Factory Mutual Insurance Company (collectively, “Plaintiffs”) filed this action as subrogees of

the University of Delaware (the “University”). Plaintiffs seek to recover insurance payments

relating to a fire allegedly caused by Defendants DiSabatino Construction Company

(“DiSabatino”), Schlosser & Associates Mechanical Contractors (“Schlosser”), and V.E.

Guerrazi, Inc. (“Guerrazi,” and collectively, “Defendants”), who were working for the University

as contractors.

         Defendants have each moved for summary judgment. Defendants contend they entered

into a contract with the University that included a waiver of subrogation, which bars all

Plaintiffs’ claims. For the set forth below, the Court GRANTS the motions for summary

judgment.

                                     II.    BACKGROUND

     A. THE PARTIES

         The State of Delaware Insurance Coverage Office is a state agency serving as a property

liability carrier for all state-owned property.1 Factory Mutual Insurance Company is a Rhode

Island corporation with its principal place of business in Johnston, Rhode Island.2 Plaintiffs

reimbursed the University of Delaware in the amounts of $2.5 million and $2.75 million,

respectively, for damages related to the fire at McKinly Hall.3 Plaintiffs are subrogated to the

University’s rights to the extent of these payments.4

1
    Cmpl. at ¶ 1 (D.I. No. 1).
2
    Id. at ¶ 2.
3
    Id. at ¶¶ 19–20.
4
    Id.

                                                 1
          DiSabatino, Schlosser, and Guerrazzi are Delaware corporations that provided

contracting services for the University in 2017.5 DiSabatino was the general contractor on the

project to renovate Lab 46 in McKinly Hall (the “Project”), Schlosser was the subcontractor, and

Guerrazzi was the sub-subcontractor.6

      B. THE PROJECT

          In May 2017, the University invited DiSabatino to bid on the Project.7 At the time, the

University and DiSabatino had a good relationship due to DiSabatino’s previous work on the

University’s projects.8

          The University created a 424-page specifications manual (the “Specifications”) as a “road

map” of the Project for potential bidders.9 The Specifications detailed the technical requirements

for the Project and provided instructions for submitting bids.10 Although the Specifications were

not a contract itself, the University expected contractors to follow the Specifications to properly

complete the Project.11 According to the record, documents like the Specifications are “standard

practice” in the construction industry.12

          The Specifications state that the successful bidder “will be required to enter into” the

“Contract” and that the “[o]ther forms which shall be used under this contract are noted in the

General, Supplementary, and Special Conditions and/or included as part of the Specifications.”13

Later, in a section titled “Contract,” the Specifications charge bidders to “[u]se A101 2007 and

5
     Id. at ¶¶ 5–7.
6
     Id.
7
     DiSabatino’s Mot. for S.J., Ex. 3 at 13:11–13 (Dep. Transcript of Joseph T. Laws, III).
8
     Id., Ex. 2 at 44:9–16 (Dep. Transcript of Lawrence J. DiSabatino).
9
     See id., Ex. 6 at 72:21–73:3 (Dep. Transcript of Joseph Farah)
10
      See id., Ex. 6 at 69:1–72:20.
11
      See id., Ex. 6 at 73:4–73:19.
12
      See id., Ex. 6 at 71:6–71:9.
13
      Id., Ex. 5 at PLF000468 (Specifications Manual).

                                                           2
A201 2007 with the following supplemental information.”14 A101 2007 and A2 2007 refer to

form construction contracts published by the American Institute of Architects. A101–2007 is the

Standard Form of Agreement Between Owner and Contractor (“A101”) and A201-2007 is the

General Conditions of the Contract for Construction (“A201”). The Specifications then provide

for a “Supplement to the Standard Form of Agreement, AIA A101-2007,” which details the

University’s line-by-line revisions to the A101. The Court will collectively refer to the contract

documents listed in the Specifications (i.e., the A101, A201, and Supplement) as the “AIA

Contract.” The Court notes that A201 of the AIA Contract, as detailed below, includes a waiver

of subrogation.

         Marcia Hutton, the University’s Director of Planning and Project Delivery, testified that

the University had historically used a “short form” contract for its construction projects.15 The

short form contract was three pages long and included the A201 and a pre-drafted supplement.16

At some point, the University transitioned to using the combination of the A101, A201, and

Supplement described in the Specifications.17 DiSabatino regarded the A101, A201, and

Supplement as the University’s “standard procedure.”18

         DiSabatino reviewed the Specifications19 and submitted its bid on May 19, 2017.20

DiSabatino’s bid used a form included in the Specifications.21 DiSabatino’s bid was $125,300.22

The University awarded DiSabatino the contract via email on May 31, 2017.23 The University

14
     Id., Ex. 5 at PLF000479.
15
     Id., Ex. 4 at 60:2–60:21 (Dep. Transcript of Marcia Hutton).
16
     Id., Ex. 4, at 60:16–60:21.
17
     Id., Ex. 4, at 60:22–61:2.
18
     Id., Ex. 7, at 27:20–28:2 (Dep. Transcript of Jeffrey P. DiSabatino).
19
     Id., Ex. 3 at 14:19–24.
20
     Id., Ex. 8 (Bid Form Dated May 19, 2017); id., Ex. 3 at 15:11–15:19; id., Ex. 6 at 74:22–75:4.
21
     Id.
22
     Id., Ex. 8.
23
     Id., Ex. 9 (Email Dated May 31, 2017); id., Ex. 6 at 84:19–85:1.

                                                          3
confirmed its acceptance of DiSabatino’s bid on June 27, 2017, with a revised contract value of

$126,400.24

     C. DEFENDANTS WORK ON THE PROJECT AND THE FIRE OCCURS

          The University needed the Project to be completed before students returned in Fall

2017.25 The University authorized DiSabatino to begin work immediately after it received the

construction permit.26 The parties did not jointly sign any contract documents before DiSabatino

began working.27 The record indicates this was not entirely unusual as DiSabatino had

previously started work on projects for the University without a signed contract, so long as

DiSabatino obtained confirmation from the University.28

          On June 5, 2017, DiSabatino submitted an executed short-form contract to the

University.29 As noted above, the University had used the short-form contract in the past but had

transitioned to using the three documents described in the Specifications. The short-form

contract that DiSabatino submitted stated that DiSabatino would complete the Project “in

accordance with the conditions and prices . . . stated in the Proposal, the General Conditions,

Supplemental General Conditions, and Special Conditions of the Contract.”30 The short-form

contract, therefore, referenced the AIA documents described in the Specifications, including the

A201. Additionally, DiSabatino executed a copy of the University’s pre-drafted supplement to

the A101 on June 2, 2017.31 When the University’s project manager, Joseph Farah, received the

24
     Id., Ex. 10 (Email Dated June 27, 2017).
25
     Id., Ex. 3 at 26:22–27:4.
26
     Id., Ex. 3 at 28:17–29:5; id., Ex. 2 at 28:10–28:12.
27
     Id., Ex. 2 at 28:5–20, 89:20–90:4.
28
     Id., Ex. 7 at 13:11–23.
29
     Id., Ex. 3 at 34:10–34:16.
30
     Id., Ex. 11 (Short-Form Contract).
31
     Id., Ex. 12 (Supplement)

                                                            4
short-form contract, he responded that DiSabatino should modify the “substantial completion

date” to a date in July 2017.32

         DiSabatino had almost completed the Project when a fire occurred in McKinly Hall on

August 9, 2017.33 After the fire, DiSabatino realized it had not received an executed contract

from the University.34 DiSabatino initiated correspondence to obtain executed contract

documents, and then re-submitted the short-form contract and the supplement to the A101.35 On

August 15, the University requested that DiSabatino produce an A101 and A201 as soon as

possible.36 The University’s intention was to execute the full AIA Contract retroactively.37

         The University suggested that the retroactive AIA Contract should have a contract

commencement date of May 31, 2017.38 DiSabatino did not object. But then the University

suggested modifications to terms of the AIA Contract relating to delay damages and other mark-

ups.39 DiSabatino refused, explaining it would not agree to modifications of substantive terms

after the fact.40 The University then agreed that the original AIA Contract terms, as included by

the University in the Specifications, would remain in place.41 The University never provided

DiSabatino with an executed copy of the AIA Contract. DiSabatino did not ask the University to

execute the AIA Contract because it “believed [they] were under contract,” such that the “actual

signature” seemed “superfluous.”42

32
    Id., Ex. 13 (Email Dated June 6, 2017).
33
    Id., Ex. 6 at 93:1–93:9.
34
    Id., Ex. 7 at 18:15–19:7.
35
    Id.; id., Ex 19 (Email Dated Aug. 11, 2017).
36
    Id., Ex. 4 at 112:9–112:14.
37
    Id., Ex. 4 at 112:15–112:19.
38
    Id., Ex. 4 at 125: 3–9.
39
    Id., Ex. 20 (Email Dated August 29, 2017); id., Ex 21 (Email Dated Sept. 5, 2017); see also id., Ex. 2 at 49:1–
49:12, 111:20–113:11.
40
    Id., Ex. 21; id., Ex. 4 at 117:22–118:12.
41
    Id., Ex. 22 (Email Dated Sept. 18, 2017); id., Ex. 2 at 114:24–115:10.
42
    Id., Ex. 2 at 87:7–87:16.

                                                          5
     D. THE UNIVERSITY AND DISABATINO ENTER INTO A TERMINATION AGREEMENT

         In November 2017, the University decided to terminate DiSabatino’s engagement on the

Project.43 The University then drafted a Conclusion of Services Agreement (“COSA”).44 On

November 8, 2017, the University emailed the COSA to DiSabatino, describing it as “an

agreement that will facilitate a conclusion of our agreement.”45 The University requested an

accounting of DiSabatino’s work on the Project, which DiSabatino provided.46 DiSabatino’s

accounting showed a contracting amount of $119,241.04.47

         DiSabatino executed the COSA and submitted it to the University on January 17, 2018.

DiSabatino understood the COSA as reserving the rights the parties had according to the AIA

Contract.48 DiSabatino did not view the COSA as modifying the AIA Contract.49 DiSabatino

maintains it would not have executed the COSA if the COSA modified the terms of the AIA

Contract.50 After DiSabatino signed the COSA, the University paid it $119,241.04.51

     E. RELEVANT TERMS OF THE AIA CONTRACT AND COSA

         The A101 incorporated the A201 as part of the “Contract Documents.”52 And Section

11.3.7 of the A201, titled “Waivers of Subrogation,” reads as follows:

         The Owner and Contractor waive all rights against (1) each other and any of their
         subcontractors, sub-subcontractors, agents and employees, each of the other, and
         (2) the Architect, Architect’s consultants, separate contractors described in Article
         6, if any, and any of their subcontractors, sub-subcontractors, agents and
         employees, for damages caused by fire or other causes of loss to the extent covered
         by property insurance obtained pursuant to this Section 11.3 or other property
         insurance applicable to the Work, except such rights as they have to proceeds of

43
     Id., Ex. 4 at 148:6–148:11.
44
     Id., Ex. 24 (Email Dated Nov. 8, 2017).
45
     Id.
46
     Id.
47
     Id., Ex. 25 (Letter Dated Dec. 4, 2017).
48
     Id., Ex. 2 at 93:10–94:18.
49
     Id.
50
     Id., Ex. 2 at 119:6–119:12, 121:3–121:9.
51
     Id., Ex. 28 (Email Dated March 5, 2018).
52
     Id., Ex. 29 at § 9.1.2 (AIA Documents Signed by DiSabatino).

                                                        6
         such insurance held by the Owner as fiduciary.53 The Owner or Contractor, as
         appropriate, shall require the Architect, Architect’s consultants, separate
         contractors described in Article 6, if any, and the subcontractors, sub-
         subcontractors, agents and employees of any of them, by appropriate agreements,
         written where legally required for validity, similar waivers each in favor of other
         parties enumerated herein. The policies shall provide such waivers of subrogation
         by endorsement or otherwise. A waiver of subrogation shall be effective as to a
         person or entity even though that person or entity would otherwise have a duty of
         indemnification, contractual or otherwise, did not pay the insurance premium
         directly or indirectly, and whether or not the person or entity had an insurable
         interest in the property damaged.54

Additionally, the COSA included a section titled “Non-Waiver and Reservation of Right by

Owner,” which reads follows:

         Owner does not waive, and hereby reserves, all of its rights, claims, remedies and
         defenses against Contractor; any of its subcontractors and suppliers; and any other
         person(s) or entities for whom Contractor is liable or responsible arising from or
         relating in any way to the Fire, including, without limitation, all such rights, claims
         and remedies as may now or hereafter be vested in any property or casualty insurer
         of Owner, whether public or private, by reason of applicable law, including the
         principles of subrogation and/or indemnity.55

     F. THIS CIVIL ACTION

         Plaintiffs filed their Complaint on August 8, 2019, seeking—through subrogation—to

recover damages to the University resulting from the fire.56 The Complaint asserts causes of

action for negligence (Count I), negligence per se (Count II), breach of contract (Count III), and

breach of the implied warranty of good quality and workmanship (Count IV).57 Counts I, II, and

IV are brought against all Defendants, while Count III is brought against DiSabatino alone.

         Defendants moved to dismiss, arguing that the AIA Contract expressly waived

subrogation claims.58 After Plaintiffs filed their opposition, Defendants requested that briefing

53
     The University’s Supplement strikes “as fiduciary.” See id., Ex. 5 at PLF000509.
54
     Id., Ex. 18 (A201).
55
     Id., Ex. 26 (COSA).
56
     Complaint at ¶¶ 19–20.
57
     Id. at ¶¶ 21–53.
58
     See D.I. Nos. 16, 19, 20.

                                                         7
on the motions to dismiss be stayed and that the Court allow discovery as to the operative

contract.59 The Court denied Defendants’ request on December 10, 2019.60 In response,

Defendants withdrew their motions to dismiss and answered the Complaint.61

         Following discovery, Defendants moved for summary judgment in July 2021.62 The

Court heard argument on December 21, 2021.63 At the conclusion of the hearing, the Court took

the motions under advisement.64

                                    III.     PARTIES’ CONTENTIONS

         Defendants argue that the AIA Contract is the operative agreement between the

University and DiSabatino, and that because the AIA Contract included a waiver of subrogation,

all Plaintiffs’ claims are barred.65 Defendants acknowledge that the parties never jointly signed

the AIA Contract forms. Nevertheless, Defendants maintain the parties objectively manifested

an intent to be bound by the terms of the AIA Contract.66 Furthermore, Defendants argue that

the COSA did nothing to modify the waiver of subrogation67 and that the waiver is fatal to all

claims against all Defendants.68

         Plaintiffs advance several arguments in opposition. First, Plaintiffs argue that contract

formation is a jury question.69 Second, Plaintiffs claim there are factual issues on whether the

parties objectively manifested an intent to be bound by the AIA Contract.70 Plaintiffs maintain

59
    See D.I. Nos. 27–28.
60
    D.I. No. 35.
61
    D.I. Nos. 40, 47, 52–53.
62
    See D.I. Nos. 83–85.
63
    D.I. No. 91.
64
    D.I. No. 91.
65
    DiSabatino’s Mot. for S.J. at 20–25.
66
    Id. at 22–25.
67
    Id. at 25–27.
68
    Id. at 28–33.
69
    Plaintiffs’ Answering Br. at 20–21.
70
    Specifically, Plaintiffs cite a case from 1935 for the proposition that “[t]he question of whether an alleged
contract was made is for the jury where, as here, a party introduces not only written evidence but also ‘facts and
circumstances tending to show that the parties, by their acts, had recognized existence of that contract.’” Id. at 21

                                                           8
that DiSabatino and the University had a “meeting of the minds” only on the essential terms of

price and scope of work, but not on the form of their contract.71

         Alternatively, Plaintiffs argue that even if the University and DiSabatino agreed to be

bound by the AIA Contract, the COSA modified the AIA Contract to remove the waiver of

subrogation. Plaintiffs also suggest that the waiver would be limited to certain parts of McKinly

Hall and that it would not extend to DiSabatino’s subcontractors and sub-subcontractors.

                                      IV.      STANDARD OF REVIEW

         The standard of review on a motion for summary judgment is well-settled. The Court’s

principal function when considering a motion for summary judgment is to examine the record to

determine whether genuine issues of material fact exist, “but not to decide such issues.”72

Summary judgment will be granted if, after viewing the record in a light most favorable to a

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

judgment as a matter of law.73 If, however, 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 will not be granted.74

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

support his claims or defenses.75 If the motion is properly supported, then the burden shifts to

(quoting Universal Prods. Co., Inc. v. Emerson, 179 A. 387, 395 (Del. 1935). The Court will not dwell on this
argument because Delaware courts routinely analyze contract formation under such circumstances on summary
judgment. See, e.g., Price v. State Farm Mut. Auto. Ins. Co., 2013 WL 1213292, at *6–7 (Del. Super. Ct. Mar. 15,
2013), aff’d, 77 A.3d 272 (Del. 2013) (finding, on summary judgment, that the plaintiff manifested assent to a
settlement offer through his conduct).
71
     Plaintiffs’ Answering Br. at 28.
72
   Merrill v. Crothall-American Inc., 606 A.2d 96, 99-100 (Del. 1992) (internal citations omitted); Oliver B. Cannon
& Sons, Inc. v. Dorr-Oliver, Inc., 312 A.2d 322, 325 (Del. Super. 1973).
73
   Id.
74
   Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962); see also Cook v. City of Harrington, 1990 WL 35244 at
*3 (Del. Super. Feb. 22, 1990) (citing Ebersole, 180 A.2d at 467) (“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.”).
75
   Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1970) (citing Ebersole, 180 A.2d at 470).

                                                            9
the non-moving party to demonstrate that there are material issues of fact for the resolution by

the ultimate factfinder.76

                                            V.       DISCUSSION

        Defendants’ motions raise three main questions: (1) is the AIA Contract the operative

contract between DiSabatino and the University; (2) if so, did the COSA modify the waiver of

subrogation in the A201; and (3) if the waiver remains effective, what is the effect of the waiver

on Plaintiffs’ claims? For the reasons set out below, the Court holds that the AIA Contract is the

operative contract between DiSabatino and the University; that the COSA did not modify the

waiver of subrogation in the A201; and that the waiver bars all of Plaintiffs’ claims against all

Defendants. Accordingly, the Court grants Defendants’ motions.

     A. THE AIA CONTRACT IS THE OPERATIVE CONTRACT

        A valid contract exists when (1) the parties intended that the contract would bind them,

(2) the terms of the contract are sufficiently definite, and (3) the parties exchanged legal

consideration.77 At issue here is the first element: Did the parties intend for the AIA Contract to

bind them? The Court finds that the University and DiSabatino did.

        The question of intent “looks to the parties’ intent to the contract as a whole, rather than

analyzing whether the parties possess the requisite intent to be bound to each particular term.”78

Under Delaware law, “overt manifestation of assent—not subjective intent—controls the

formation of a contract.”79 In applying this objective test, “the court reviews the evidence that

the parties communicated to each other up until the time that the contract was signed—i.e., their

76
   See Brzoska v. Olsen, 668 A.2d 1355, 1364 (Del. 1995).
77
     Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1158 (Del. 2010) (internal citations omitted).
78
     See Eagle Force Holdings, LLC v. Campbell, 187 A.3d 1209, 1229 (Del. 2018).
79
     Id. (internal quotations omitted).

                                                        10
words and actions—including the putative contract itself.”80 Where the putative contract is in

the form of a signed writing, that document generally offers the most powerful and persuasive

evidence of the parties’ intent to be bound.81 “However, Delaware courts have also said that, in

resolve this issue of fact, the court may consider evidence of the parties’ prior or

contemporaneous agreements and negotiations in evaluating whether the parties intended to be

bound by the agreement.”82 Furthermore, “[n]othing in the law of contracts requires that a

contract be signed to be enforceable.”83

        The Court finds that the University and DiSabatino objectively manifested assent to using

the AIA Contract as their contract. The University initially invited DiSabatino to bid on the

Project and provided the Specifications as a directive for the bid. The Specifications said that a

successful bidder would be “required to enter into” the “Contract.”84 In the Specifications, a

section titled “Contract” directed bidders to “use A101 2007 and A201 2007 with the following

supplemental information.”85 In other words, the University expressly informed DiSabatino

during bidding that the contract would be the AIA Contract. DiSabatino agreed. By signing the

Bid Form included in the Specifications, DiSabatino certified that it understood the requirements

detailed in the Specifications and that it would carry out the Project “in accordance with the

Specifications . . . .”86 Therefore, the University and DiSabatino objectively manifested assent to

using the AIA Contract during the bidding stage of their relationship.

80
    Id. at 1229–30 (internal citations omitted).
81
    Id. at 1230 (internal citations omitted).
82
    Id. (internal citations omitted).
83
    See Whittington v. Dragon Grp. L.L.C., 2013 WL 1821615, at *3 (Del. Ch. May 1, 2013) (collecting cases); see
also 17A Am. Jur. 2d Contracts § 174 (“Signature spaces in a form contract do not in and of themselves require that
signatures of the parties are a condition precedent to the agreement’s enforceability.”).
84
    DiSabatino’s Mot. for S.J., Ex. 5 at PLF000468.
85
    Id., Ex. 5 at PLF000479.
86
    See id., Ex. 8.

                                                        11
         The Court notes that the University and DiSabatino did not execute the AIA Contract as

the Specifications required.87 Nevertheless, the Court finds that their conduct after the

University selected DiSabatino’s bid manifests an intent to be bound by the AIA Contract. On

June 2, 2017, DiSabatino executed a copy of the University’s pre-drafted supplement to the

A101.88 The top of the first page again instructed the bidder to “[u]se A101 2007 and A201

2007 with the following supplemental information.”89

         On June 5, 2017, DiSabatino executed a copy of the University’s short-form contract.90

The record, however, demonstrates that DiSabatino made a mistake by signing the short-form

contract as the Specifications did not call for the short-form contract and the University had

ceased using it by this time. The Court finds that DiSabatino’s mistake was harmless because

the short-form contract said DiSabatino would complete the Project “in accordance with the

conditions and prices . . . stated in the Proposal, the General Conditions, Supplemental General

Conditions, and Special Conditions of the Contract . . . .”91 In other words, DiSabatino expressly

informed the University that it intended to follow the terms of the AIA Contract, including the

A201.

         In response, the University did not to inform DiSabatino that it had submitted the wrong

form, nor did it take issue with DiSabatino’s stated intent to follow the Specifications and the

AIA Contract. Instead, the University simply asked DiSabatino to slightly alter the date of

substantial completion.92 The Court finds that a reasonable, objective third party in DiSabatino’s

87
    See id., Ex. 5 at PLF000468 (“Within five (5) days of receipt of the Contract, the successful Bidder shall execute
the Contract and return it to the Owner for execution by the University. The Contract to be signed will be in the
form included in the Bidding Documents.”).
88
    Id., Ex. 12.
89
    Id.
90
    Id., Ex. 11.
91
    Id.; see also id., Ex. 4 at 60:16–60:21 (Marcia Hutton acknowledging that the short form contract included the
A201).
92
    See id., Ex. 13.

                                                         12
position would interpret the University’s response as implicitly approving DiSabatino’s other

statements in the short-form contract.93

         The conduct of the parties after the fire provides the final proof of their intent.

DiSabatino sent the University additional copies of the short-form contract and Supplement.94

This time, the University (through Ms. Hutton) informed DiSabatino that it had submitted the

wrong form:

         Thanks for delivering the contract Friday. Unfortunately it is not the format
         outlined in the bid documents for this particular project. This was a project that
         referenced the A101 2007 and A201 2007 and our supplemental information.
         Please produce that contract and submit as soon as possible.95

In other words, Ms. Hutton asked DiSabatino to sign and submit the AIA Contract as it was

described in the Specifications. The only reasonable interpretation of Ms. Hutton’s request is

that the University regarded the AIA Contract as the operative contract between itself and

DiSabatino. Otherwise, the University would have had no reason to ask DiSabatino to sign and

submit it. DiSabatino did, as Ms. Hutton asked, submit the signed AIA Contract, thereby

confirming its assent to being bound by its terms.

         DiSabatino and the University objectively manifested an intent to be bound by the AIA

Contract at each stage of their relationship. Pre-bidding, the University made clear through its

Specifications that the contract would be the AIA Contract. DiSabatino agreed. After receiving

the Project, DiSabatino told the University it would follow the Specifications. The University

93
     See Corp. Service Co. v. Kroll Assoc., Inc., 2001 WL 755934, at *4 (Del. Super. June 15, 2001) (“When the
offeree through his conduct leads the offeror to conclude that he has accepted the proposal, . . . the court will view
silence as being tantamount to acceptance.”). The Kroll court applied this principle in circumstances somewhat like
the case now before the Court. In Kroll, an individual “clearly expressed to [the plaintiff] her expectations with
respect” to the fees that plaintiff charged for certain services. Id. The individual’s understanding of the plaintiff’s
fee structure was incorrect. But the plaintiff failed to correct her misunderstanding during a subsequent discussion,
“the purpose of which was to clarify [the plaintiff’s] pricing.” Id. In this context, the Kroll court found that the
plaintiff “objectively manifested [its] assent” to the individual’s proposal with respect to the plaintiff’s pricing. Id.
94
     DiSabatino’s Mot. for S.J., Ex. 19.
95
     See id., Ex. 20 at 3.

                                                           13
told DiSabatino to begin work. After the fire, the University asked that DiSabatino sign and

submit the full AIA Contract. DiSabatino did so. Even if the University never ultimately signed

the AIA Contract, both it and DiSabatino objectively manifested assent to using it as their

contract. The undisputed facts allow no other conclusion, even when they are interpreted in

Plaintiffs’ favor. As a result, the parties agreed to be bound by the waiver of subrogation in the

A201.

     B. THE COSA DID NOT MODIFY THE WAIVER OF SUBROGATION

        Plaintiffs argue that even if the AIA Contract is operative, the COSA modified the waiver

of subrogation in the A201.96 The Court finds that Plaintiffs’ interpretation is inconsistent with

the COSA’ plain and unambiguous language.

        The COSA is a contract, and “[t]he proper construction of any contract . . . is purely a

question of law.”97 The goal of contract interpretation “is to fulfill the parties’ expectations at

the time they contracted.”98 “But because Delaware adheres to an objective theory of contracts,”

the Court's interpretation must be intelligible to an “objective, reasonable third party.”99 To that

end, the Court construes “clear and unambiguous terms according to their ordinary meaning.”100

Ambiguity exists only if the disputed language is “fairly or reasonably susceptible to more than

one meaning.”101 Summary judgment cannot be granted if a disputed contract term is

ambiguous.102

96
    Plaintiffs’ Answering Br. 29.
97
    Exelon Generation Acquisitions, LLC v. Deere & Co., 176 A.3d 1262, 1266–67 (Del. 2017) (internal citations
omitted).
98
    Leaf Invenergy Co. v. Invenergy Renewables LLC, 210 A.3d 688, 696 (Del. 2019) (internal quotation marks
omitted).
99
    Id.
100
     Id.; see also Salamone v. Gorman, 106 A.3d 354, 368 (Del. 2014) (“Contract terms themselves will be
controlling when they establish the parties’ common meaning so that a reasonable person in the position of either
party would have no expectations inconsistent with the contract language.”) (internal quotation marks omitted).
101
     Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012).
102
     See, e.g., GMG Cap. Invs., LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776, 783 (Del. 2012).

                                                        14
         The relevant clause of the COSA was titled “Non-Waiver and Reservation of Right by

Owner” and stated:

         Owner does not waive, and hereby reserves, all of its rights, claims, remedies and
         defenses against Contractor; any of its subcontractors and suppliers; and any other
         person(s) or entities for whom Contractor is liable or responsible arising from or
         relating in any way to the Fire, including, without limitation, all such rights, claims
         and remedies as may now or hereafter be vested in any property or casualty insurer
         of Owner, whether public or private, by reason of applicable law, including the
         principles of subrogation and/or indemnity.103

This clause does not purport to expand the University’s rights or restore any rights that the

University previously waived. Instead, the clause provides that the University “does not waive”

and “reserves” its rights “as may now or hereafter be vested . . . .” As discussed above, the Court

held that the University had previously waived the right of subrogation by agreeing to be bound

by the AIA Contract. Nothing in the COSA can reasonably be interpreted as changing that.

         The Court’s conclusion is consistent not only with the plain language of the COSA, but

also settled law regarding non-waiver clauses. The purpose of non-waiver clauses “is generally

to ensure that a party to a contract is given an opportunity to make a thoughtful and informed

decision about whether or not to enforce a particular contract right.”104

         “Moreover, with regard to commercial contracts entered into between legal entities
         that can only act through authorized agents, they ensure that a contracting party will
         not lose its rights due to spontaneous words and acts of corporate agents. In this
         sense, non-waiver clauses serve to inform the other contracting party that no
         individual agent has the authority to waive or alter contract terms. Rather, they
         make clear that some official act is required in order to actually change the original
         agreement.”105

As the law instructs, non-waiver clauses generally are not understood as expanding the rights of

a party, but rather ensuring those rights are not reduced.

103
      Id., Ex. 26.
104
      Viking Pump, Inc. v. Liberty Mut. Ins. Co., 2007 WL 1207107, at *27 (Del. Ch. Apr. 2, 2007).
105
      Id.

                                                        15
         The Court’s conclusion does not change because the non-waiver clause in the COSA

referred to the “principles of subrogation.” The Court notes that “laundry list” of rights is

general and not specific. The language illustrates the rights preserved, if any, and does not

purport to expand or create new rights between the parties. In short, the COSA did not change

the fact that the University had previously waived the right of subrogation.

      C. THE WAIVER OF SUBROGATION EXTENDS TO ALL DAMAGES

         The fire in McKinly Hall damaged both the areas that Defendants were renovating for the

Project and other areas, which were not part of the Project. Plaintiffs argue the waiver of

subrogation should apply only to damages associated with the Project, and not to the non-Project

areas.106 This argument rests on Plaintiffs’ interpretation of the A201 and various cases,

including St. Catherine of Sienna Catholic Church v. J.R. Pini Electrical Contractors Inc.107

         The Court, however, rejected this very argument in St. Paul Fire & Marine Ins. Co. v.

Elkay Mfg. Co.108 In Elkay Mfg. Co., the Court noted that St. Catherine had recognized a

distinction between “work” and “non-work” areas for purposes of the waiver of subrogation in

the A201.109 However, the Court distinguished St. Catherine on the grounds that it addressed an

earlier version of the A201.110 The A201 had since been updated in a way that “effectively

extended the waiver of subrogation to non-work areas which have been covered by separate

property insurance.”111 The Court therefore rejected an argument similar to the one Plaintiffs

make now.

106
      See Plaintiffs’ Answering Br. at 30.
107
      2000 WL 1211146 (Del. Super. Ct. June 27, 2000), aff’d, 781 A.2d 695 (Del. 2001).
108
      2003 WL 139775, at *6 (Del. Super. Ct. Jan. 17, 2003).
109
      Id.
110
      Id.
111
      See id. (distinguishing the 1987 version of the A201 from earlier versions).

                                                       16
         Plaintiffs appear to recognize that Elkay Mfg. Co. is unfavorable and suggest in a footnote

that it was wrongly decided.112 Plaintiffs are not alone in arguing that the A201 should be

interpreted as waiving subrogation only for damage to work property.113 However, a recent

review of the case law by the Fifth Circuit concluded this is the “minority approach.”114

Conversely, the decision in Elkay Mfg. Co. is consistent with the “majority approach.”115 The

Court is therefore satisfied with and adopts the reasoning in Elkay Mfg. Co.

         The University and DiSabatino used a version of the A201 that contains the same

relevant terms as the version addressed in Elkay Mfg. Co.116 Moreover, it appears undisputed

that the non-work areas of McKinly Hall were separately insured. The waiver therefore extends

to those areas as well.

      D. THE WAIVER OF SUBROGATION EXTENDS TO ALL DEFENDANTS

         Schlosser and Guerrazzi were not parties to the AIA Contract. As such, Plaintiffs argue

the waiver would extend to them only if they were third-party beneficiaries of the agreement

between the University and DiSabatino.117 The University’s supplementary conditions in the

Specifications disclaims any intent “confer upon any third party, including any of the

Contractor’s Subcontractors . . . the rights of a third party beneficiary.”118 Plaintiffs therefore

contend that the subrogation waiver does not reach Schlosser and Guerrazzi.

112
     Plaintiffs’ Answering Br. at 33 n.16 (arguing that Elkay “did not consider Section 11.3.7 in the broader context
of the A201-2007, including Sections 3.18.1 and 11.1.1”).
113
     See Liberty Mut. Fire Ins. Co. v. Fowlkes Plumbing, L.L.C., 934 F.3d 424, 427–428 (5th Cir. 2019).
114
     See id.
115
     See id. at 427 (collecting cases); see also see also Liberty Mut. Fire Ins. Co. v. Fowlkes Plumbing, L.L.C., 290
So. 3d 1257 (Miss. 2020) (answering the Fifth Circuit’s certified question by adopting the majority approach).
116
     Elkay Mfg. Co. involved the 1987 version of the A201, while this case deals with the 2007 version of the A201;
however, the sections containing the subrogation waiver and the same in both versions.
117
     Plaintiffs’ Answering Br. at 33.
118
     Id. at 34 (internal citation omitted).

                                                         17
          The waiver in the A201 expressly states that the “Owner and Contractor waive all rights

against (1) each other and any of their subcontractors, sub-subcontractors, agents and

employees, each of the other . . . for damages caused by fire or other causes of loss . . . .”119 This

language unambiguously means that the waiver extends to Schlosser and Guerrazzi. The Court

finds that an argument to the contrary is an unreasonable interpretation of the unambiguous

language of the operative document.

                                            VI.   CONCLUSION

          For the foregoing reasons, the Court holds that the AIA Contract is the operative contract

between the University and DiSabatino, and that the parties are bound by the waiver of

subrogation therein; that the COSA did not affect the waiver; and that the waiver extends to all

damages associated with the fire and all Defendants. Accordingly, Defendants’ motions for

summary judgment are GRANTED.

Dated: March 17, 2022
Wilmington, Delaware

                                                  /s/ Eric M. Davis
                                                  Eric M. Davis, Judge

cc: File&ServeXpress

119
      DiSabatino’s Mot. for S.J., Ex. 18.

                                                    18