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Vsi Sales, LLC v. Griffin Sign, Inc.

United States District Court, D. Delaware

April 25, 2014

VSI SALES, LLC, Plaintiff,


GREGORY M. SHEET, Chief District Judge.


On November 22, 2013, the plaintiff VSI Sales, LLC ("VSI") filed a complaint against Griffin Sign, Inc. ("Griffin") and International Fidelity Insurance Company ("IFIC"), (collectively, "the defendants"), asserting seven causes of action, including Count IV - "Violation of the Delaware [Construction] Prompt Payment Act."[1] (D.I. 1, ¶ 82 (citing 6 Del. C. § 3507).) Presently before the court are the defendants' Rule 12(b)(6) motion to dismiss Count IV, (D.I. 12), and VSI's Motion to Compel Release of Undisputed Funds, (D.I. 13). For the reasons that follow, the court grants the defendants motion to dismiss without prejudice, and denies VSI's motion to compel.


The subject of the underlying dispute is a highway construction project at the intersection of State Route 1 and Interstate 95 in Newcastle County, Delaware ("the Project"). (D.I. 1, ¶ 9.) The Delaware Department of Transportation ("DelDOT") awarded a contract to Cherry Hill Construction, Inc. ("Cherry Hill"), as the general contractor, to perform the required work. (Id.) Cherry Hill hired Griffin as a subcontractor and Griffin, in turn, hired VSI as its subcontractor to provide overhead highway sign structures, accompanying hardware, installation materials. ( Id., ¶¶ 10-40.) IFIC issued a Payment Bond guaranteeing Griffin's payment to downstream subcontractors for work on the Project. ( Id., ¶¶ 41-45.) VSI alleges that Griffin owes it money for work performed on the Project. ( See D.I. 1.) Griffin disputes that it owes money to VSI, and seeks damages from VSI due to "significant problems with VSI's design and untimely supply of the highways sign structures and associated components." (D.I. 12-1 at 2.)


Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a complaint or portions of a complaint where the plaintiff "fail[s] to state a claim upon which relief can be granted." In considering a motion to dismiss, the court "accept[s] all factual allegations as true, construe[s] the complaint in the light most favorable to the plaintiff, and determine[s] whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). The issue for the court is "not whether the plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). As such, the touchstone of the pleading standard is plausibility. Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012). The "complaint must plead enough factual matter' that, when taken as true, state[s] a claim to relief that is plausible on its face.'" In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1331 (Fed. Cir. 2012) (quoting Bell At. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). Thus, "[d]etermining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679.


A. The Defendants' Rule 12(b)(6) Motion to Dismiss Count IV - "Violation of the Delaware [Construction] Prompt Payment Act."

The defendants argue that Count IV of VSI's Complaint should be dismissed because the work performed by Griffin and VSI on the Project - the installation of highways signs and guard rails - is outside the scope of the Construction Prompt Payment Act (the "Act"). (D.I. 17 at 1.) Specifically, the defendants argue that the Act's clear and unambiguous language is limited to building construction, and VSI's work was limited to the supply of highway sign structures, which are not materials or components used in the construction of a building. (D.I. 12-1 at 4-6.)

In response, VSI contends that it would be premature to dispose of the claim based on the defendants' narrow definition of "building" because "the complex steel super structures involved here are no different in application, fabrication or use than the steel members incorporated into traditional buildings or other construction projects." (D.I. 15 at 6.) VSI also contends that it should be allowed to conduct discovery to determine if its work on the Project was "in connection with... the... construction... of any building." (Id. at 5 (quoting 6 Del C. § 3501(2).) In essence, VSI argues that discovery may reveal that another party working on the Project erected or constructed buildings, "such as toll booths, electrical and water stations, highway patrol barracks, and any other associated structures." (Id.) Finally, VSI argues that the Construction Prompt Payment Act should be construed to apply to a broader range of improvements to land in accordance with the corollary mechanics' lien statutes. (Id. at 7-8 (citing State v. Pierson, 86 A.2d 559, 560 (Del. Super. Ct. 1952) (finding that a previous, but similar, version of the statute "may be considered a corollary or supplement to the Mechanics Lien Law....")).)

The court is not persuaded by VSI arguments. The rules of statutory construction are well settled under Delaware law.

First, [the court] must determine whether the statute is ambiguous. If it is unambiguous, then there is no room for judicial interpretation and the plain meaning of the statutory language controls. The statute is ambiguous if it is susceptible of two reasonable interpretations or if a literal reading of its terms would lead to an unreasonable or absurd result not contemplated by the legislature. If the statute is ambiguous, then [the court] consider[s] it as a whole and... read[s] each section in light of all the others to produce a harmonious whole.

CML V, LLC v. Bax, 28 A.3d 1037, 1041 (Del. 2011) (citations and internal quotation marks omitted). Further, the Delaware Legislature has instructed that, for the purposes of interpreting its statutes, "[w]ords and phrases shall be read with their context and shall be construed according ...

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