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Nemours Foundation v. Manganaro Corp.

filed: May 31, 1989.

THE NEMOURS FOUNDATION
v.
MANGANARO CORPORATION, NEW ENGLAND, APPELLANT



On Appeal from the United States District Court for the District of Delaware, D.C. Civil No. 89-00138.

Higginbotham, Sloviter, and Scirica, Circuit Judges.

Author: Sloviter

Opinion OF THE COURT

SLOVITER, Circuit Judge

I.

This case is before us on a motion by the appellee, The Nemours Foundation (Nemours), to dismiss an appeal taken by Manganaro Corporation from an order of the district court sitting in diversity which certified two questions of state law to the Delaware Supreme Court. This presents a question which, as far as we can tell, is one of first impression in the courts of appeals.

In the underlying litigation Nemours sued Manganaro, who was a subcontractor on Nemours' hospital construction project, seeking to recover damages stemming from delays in the construction. Nemours asserts that it can bring the suit under Delaware law as a third-party beneficiary of the contract between Manganaro and the prime contractor or, alternatively, that Manganaro is liable to it in tort for economic damages.

Under Rule 41 of the Delaware Supreme Court, the United States District Court for the District of Delaware may "certify to this Court . . . a question of law arising in any case before it prior to the entry of final judgment if there is an important and urgent reason for an immediate determination of such question by this Court." Del.Sup.Ct.R. 41(a). Nemours sought certification of state law questions which it argued were unsettled and would be dispositive of its ability to recover on the theories described above. On May 5, 1989, the district court certified the following questions to the Delaware Supreme Court:

1. Does the incorporation of Article 1.1.2 of the General Conditions of the Contract for Construction (AIA Document A201-1976 Edition) into a subcontract preclude an owner of a construction project from being an intended third party beneficiary of the subcontract;

2. Can a plaintiff not in privity with the defendant maintain a negligence action against the defendant for the recovery of costs incurred as a result of completing or correcting the defendant's work?

In a previous similar suit brought by Nemours against its prime contractor and a different subcontractor, this court was required to predict Delaware law as to these same questions, and we answered them adversely to Nemours' position. See Pierce Assocs., Inc. v. Nemours Foundation, 865 F.2d 530 (3d Cir. 1988), petition for cert. filed, 57 U.S.L.W. 3755 (U.S. May 4, 1989) (88-1790). We held, by a divided vote, that Nemours could not maintain a breach of contract action under Delaware law against the subcontractor on a third-party beneficiary theory, id. at 535-39, and held unanimously that it could not recover under Delaware law in negligence for economic loss, absent privity of contract, id. at 539-41.

Managanaro appeals the district court's certification order on the ground that the district court was bound to follow the Third Circuit's prediction of Delaware law under principles of stare decisis and collateral estoppel. Nemours has filed a motion to dismiss the appeal on two grounds. Nemours argues that the order appealed from is not appealable and also that it is moot since the questions have already been certified by the district court. We do not reach the mootness issue for we agree with Nemours that we have no jurisdiction over Manganaro's appeal. Because the question of the appealability of a district order certifying questions to a state supreme court is one of first impression, we write to explain our reasons for dismissing the appeal.

II.

The proposition that an appeal can ordinarily be taken only from a final order under 28 U.S.C. ยง 1291 needs no citation. The certification order is patently interlocutory as it is merely a preliminary phase in an ongoing matter. Once the Delaware Supreme Court acts on the ...


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