Palma, Inc. v. Claymont Fire Company, No. 1, et al.

Annotate this Case

Download PDF

SUPERIOR COURT OF THE STATE OF DELAWARE JOSEPH R. SLIGHTS, III JUDGE NEW CASTLE COUNTY COURTHOUSE 500 NORTH KING STREET Suite 10400 W ILMINGTON, DE 19801 PHONE : (302) 255-0656 FACSIMILE: (302) 255-2274 November 18, 2009 Paul Cottrell, Esquire Justin P. Callaway, Esquire Tighe & Cottrell, P.A. One Customs House 704 King Street, Suite 500 P.O. Box 1031 Wilmington, DE 19899 Eric J. Monzo, Esquire Morris James, LLP 500 Delaware Avenue, Suite 1500 P.O. Box 2306 Wilmington, DE 19899 Donald Logan, Esquire Logan & Associates, LLC 100 W. Commons Boulevard, Suite 300 New Castle, DE 19720 Re: Palma, Inc. v. Claymont Fire Company, No. 1, et al. C.A. No. 09L-06-121-JRS Upon ABHA Architects, Inc. s Motion to Dismiss. GRANTED. Dear Counsel: Defendant, ABHA Architects, Inc. ( ABHA ), has moved to dismiss the tortbased claims alleged against it by Plaintiff, Palma, Inc. ( Palma ), in a case involving 1 alleged construction and design defects brought against several defendants. For the reasons stated below, ABHA s motion is GRANTED. This case arises from the installation of an epoxy floor in Claymont Fire Company, No. 1's ( Claymont ) firehouse. The portion of the complaint at issue is Count VI, which alleges a claim of negligent misrepresentation against ABHA.1 More specifically, Palma, the general contractor on the project, alleges that ABHA, an architectural firm, provided drawings, plans, specifications, and other architectural, engineering and technical information that were false, contained numerous errors, omissions, discrepancies, and ambiguities, and were not otherwise in compliance with building and design requirements. 2 At oral argument, counsel for Palma suggested that its claim extended to ABHA s negligent misrepresentations to Claymont regarding the quality of the work performed on the project by other firms (including Palma), even though this allegation does not appear in Palma s complaint. ABHA has moved to dismiss the complaint on the ground that the complaint does not allege a viable cause of action against ABHA as a matter of law. When considering a motion to dismiss, the Court must read the complaint generously, 1 See generally Compl. ¶ 40-52. 2 Compl. ¶ 45. 2 accept all of the well-plead allegations contained therein as true, and construe them in a light most favorable to the plaintiff.3 A complaint is well-plead if it puts the opposing party on notice of the claim being brought against it.4 Allegations that are merely conclusory and lacking factual basis, however, will not survive a motion to dismiss. 5 After reviewing the briefing and hearing oral argument, the Court finds that this case falls squarely within the so-called economic loss doctrine, as applied in Delaware Art Museum v. Ann Beha Architects, Inc.6 At its essence, the economic loss doctrine prevents recovery for negligent misrepresentation (and other tort claims) where only economic damages are alleged.7 As contemplated by the economic loss doctrine, economic loss includes damages for inadequate value, costs of repair and 3 See In re Tri-Star Pictures, Inc. Litig., 634 A.2d 319, 326 (Del. 1993) (finding that the reviewing court must accept the allegations of the complaint as true); Browne v. Robb, 583 A.2d 949, 950 (Del. 1990) ( The complaint sufficiently states a cause of action when a plaintiff can recover under any reasonably conceivable set of circumstances susceptible of proof under the complaint. ) (citation omitted); Johnson v. Gullen, 925 F. Supp. 244, 247 (D. Del. 1996) (same). 4 Precision Air v. Standard Chlorine of Del., 654 A.2d 403, 406 (Del. 1995). 5 See Criden v. Steinberg, 2000 WL 354390, at *2 (Del. Ch. Mar. 23, 2000) (citation omitted). 6 2007 WL 2601472, at *2 (D. Del. Sept. 11, 2007) (discussing the economic loss doctrine and exceptions thereto and ultimately holding that the claims against the defendant consultant and project engineer were barred by the economic loss doctrine). 7 Id. at *2. 3 replacement of the defective product. 8 Under the economic loss doctrine, a claim of negligent misrepresentation is only appropriate where the complaint alleges noneconomic losses such as personal injury or damage to property that is not the subject of the underlying claim. Suffice it to say, the doctrine is alive and well in Delaware.9 In this case, the complaint alleges that ABHA s negligent misrepresentation resulted in damage only to the epoxy floor itself, and the costs to repair that damage.10 Consequently, the claim is barred by the economic loss doctrine. Section 552 of the Restatement (Second) of Torts establishes an exception to the economic loss doctrine that has been recognized in Delaware.11 For the § 552 exception to apply, the plaintiff must show that the defendant supplied the information to the plaintiff for use in business transactions with third parties. 12 8 Danforth v. Acorn, 608 A.2d 1194, 1196 n.3 (Del. 1992). 9 See, e.g., Danforth, 608 A.2d at 1198 (applying the economic loss doctrine); J.W. Walker & Sons, Inc. v. Constr. Mgmt. Serv., Inc., 2008 WL 1891385, at *1 (Del. Super. Feb. 28, 2008) (same); Brasby v. Morris, 2007 WL 949485, at *7 (Del. Super. Mar. 29, 2007) (same); Noramco (Delaware), Inc. v. Carew Assoc., Inc., 1990 WL 251572, at *3 (Del. Super. Nov. 29, 1990) (same). 10 Compl. ¶ 52. 11 See Restatement (Second) of Torts § 552 (1977) ( Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss suffered (a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and (b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction. ). See also Guardian Constr. Co. v. Tetra Tech Richardson, Inc., 583 A.2d 1378, 1386 (Del. Super. 1990) (applying the § 552 exception). 12 Danforth v. Acorn, 1991 WL 269956, at *2 (Del. Super. Nov. 22, 1991). 4 Additionally, the plaintiff must show that the defendant is in the business of supplying information. 13 Whether vel non the exception applies is a case-specific inquiry.14 In this case, the complaint fails to plead any facts that would implicate the § 552 exception. The allegedly false information provided by ABHA was not provided to Palma. Rather, to the extent the complaint alleges that ABHA supplied any information, at most the complaint hints that such information was provided directly to Claymont, not to Palma.15 Therefore, Palma has not plead facts that would allow it to avail itself of the information supplier exception to the economic loss doctrine. Because the first element of the exception is not satisfied, the Court need not reach the second element and determine whether ABHA is in the business of supplying information. As discussed above, Palma s complaint reveals that its negligent misrepresentation claim against ABHA is barred by the economic loss doctrine and that it is not entitled on the current pleadings to assert the § 552 exception. That 13 Id. at *3. 14 RLI Ins. Co. v. Indian River Sch. Dist., 556 F. Supp. 2d 356, 361 (D. Del. 2008). 15 See Compl. ¶ 41 (noting that ABHA was hired by Claymont, not Palma). The Court notes that the Complaint is silent regarding ABHA s alleged misrepresentation regarding the quality of work performed by others on the project, as alluded to by Palma s counsel at oral argument. 5 being said, in view of Palma s counsel s representations at oral argument that Palma can, in good faith, allege facts that might implicate the § 552 exception, Palma is granted leave to seek to amend its complaint accordingly. For the aforementioned reasons, ABHA s Motion to Dismiss is hereby GRANTED, with leave to seek to amend its complaint by appropriate motion. IT IS SO ORDERED. Very truly yours, Joseph R. Slights, III JRS, III/sb Original to Prothonotary 6

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.