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Delphi Petroleum v. Magellan Terminals Holdings, L.P.

Superior Court of Delaware, New Castle

June 23, 2015

DELPHI PETROLEUM, Plaintiff,
v.
MAGELLAN TERMINALS HOLDINGS, L.P. Defendant.

Submitted: April 24, 2015

Upon Defendant's Motion to Dismiss

Upon Defendant's Motion for Partial Summary Judgment

Upon Plaintiff's Motion for Partial Summary Judgment

Marc S. Casarino, Esquire, White and Williams, LLP, Peter J. Mooney, Esquire (argued), White and Williams, LLP, Attorneys for Plaintiff.

Herbert W. Mondros, Esquire, Margolis Edelstein, David E. Keglovits, Esquire (argued) and Erin K. Dailey, Esquire, GableGotwals, Attorneys for Defendant.

OPINION AND ORDER

Ferris W. Wharton, Judge.

I. INTRODUCTION

Before the Court are Magellan's Motion to Dismiss and Motion for Partial Summary Judgment and Delphi's Motion for Partial Summary Judgment with regard to a commercial contract and fraud dispute concerning operations at a marine terminal located at the Port of Wilmington in Delaware ("Terminal"). The parties request that the Court resolve several issues to narrow the scope of the dispute in anticipation of trial. In Magellan's Motion to Dismiss, Magellan seeks dismissal of Counts III, IV and V of the Second Amended Complaint ("SAC"), which all allege fraud. In Magellan's Motion for Partial Summary Judgment, Magellan requests that the Court determine that 1) Delphi cannot produce evidence such that a reasonable trier of fact could find that Magellan breached certain contract provisions; 2) Count II of the SAC for breach of the implied covenant of good faith and fair dealing fails as a matter of law; and 3) Delphi is not entitled to consequential damages as a matter of law. In Delphi's Motion for Partial Summary Judgment, Delphi requests that the Court determine that 1) Magellan owes Delphi $421, 603.06 for overbilling of heating charges under the 2005 Agreement; 2) Delphi has no responsibility to Magellan for heating charges under the 2011 Agreement; 3) Magellan breached the 2011 Agreement by denying Delphi the right to deliver product to the terminal by truck; 4) Delphi's responsibility for tank cleaning is limited to removing product and waste that can be removed by shovel and broom; and 5) Magellan's Amended Counterclaim fails for lack of factual support.

The Court applies Super. Ct. Civ. R. 12(b)(6) to Magellan's Motion to Dismiss and Super. Ct. Civ. R. 56(c) to Magellan's Motion for Partial Summary Judgment and Delphi's Motion for Partial Summary Judgment. Applying the Motion to Dismiss standards, the Court finds that 1) Delphi failed to state a claim for which relief can be granted as to Count III of the SAC; 2) it is premature to determine whether the statute of limitations precludes recovery under Count IV of the SAC; and 3) Delphi has adequately pleaded a cause of action under Count V of the SAC.

Applying Super. Ct. Civ. R. 56(c) to Magellan's Motion for Partial Summary Judgment, the Court finds that 1) no reasonable trier of fact could find that a breach of contract occurred based upon Magellan's conduct alleged in ¶¶8(k), (d), (o) and (a) of the SAC and that factual issues remained as to ¶¶8(p) and (e) of the SAC; 2) Count II of the SAC for breach of the implied covenant of good faith and fair dealing is limited; and 3) the Court cannot find that Delphi is not entitled to consequential damages as a matter of law.

Applying Super. Ct. Civ. R. 56(c) to Delphi's Motion for Partial Summary Judgment, the Court finds that 1) there is a factual dispute regarding whether Magellan owes Delphi $421, 603.06 for overbilling of heating charges under the 2005 Agreement; 2) the Court cannot rule as a matter of law that Delphi has no responsibility to Magellan for heating charges under the 2011 Agreement; 3) Magellan did not breach the 2011 Agreement by denying Delphi the right to deliver product to the terminal by truck; 4) the Court cannot grant the relief Delphi requests regarding responsibility for tank cleaning based upon its prayer; and 5) Magellan identified the factual basis of its Amended Counterclaim.

Therefore, Magellan's Motion to Dismiss is GRANTED, in part, and DENIED, in part; Magellan's Motion for Partial Summary Judgment is GRANTED, in part, and DENIED, in part; and Delphi's Motion for Partial Summary Judgment is DENIED, in part, and MOOT, in part.

II. PROCEDURAL CONTEXT

Delphi, a Delaware corporation, buys and sells petroleum products. Magellan, a Delaware limited partnership, operates a marine terminal in Wilmington, Delaware ("Terminal") to store and handle petroleum products. Delphi and Magellan executed several contracts through which Magellan agreed to provide Delphi with services at the Terminal and Delphi agreed to pay Magellan certain fees. Delphi and Magellan executed a Terminalling Agreement on September 1, 2005 ("2005 Agreement").[1] Delphi and Magellan entered into a second Terminalling Agreement that was executed by Delphi on May 13, 2011 and by Magellan on May 16, 2011 ("2011 Agreement").[2] Delphi and Magellan executed the Flush Oil Agreement on March 1, 2007.[3]

On February 29, 2012, Delphi filed a Complaint against Magellan for breach of contract, negligence, conversion and unjust enrichment related to the 2005 and 2011 Agreements.[4] On October 23, 2013, the Court approved the parties' stipulation to file an Amended Complaint.[5] The Amended Complaint contained counts for breach of contract, breach of the implied covenant of good faith and fair dealing, conversion, unjust enrichment and fraud.[6] The Court granted Magellan's Motion to Dismiss the Amended Complaint with respect to the conversion, unjust enrichment and fraud counts[7] and the Court denied Delphi's Motion for Reconsideration of the Order.[8] On December 22, 2014, Delphi filed a Motion for Leave to File Second Amended Complaint.[9] On January 16, 2015, both parties filed Motions for Partial Summary Judgment[10] By Order dated January 20, 2015, the Court granted Delphi's Motion for Leave to File Second Amended Complaint, which revived Delphi's fraud claims.[11] On February 2, 2015, Delphi filed the SAC alleging breach of contract, breach of the implied covenant of good faith and fair dealing and three claims for fraud.[12] On February 17, 2015, Magellan filed a Motion to Dismiss the three fraud claims in the SAC.[13] The parties appeared before the Court for oral argument on April 24, 2015 on Magellan's Motion to Dismiss, Magellan's Motion for Partial Summary Judgment and Delphi's Motion for Partial Summary Judgment.

III. STANDARD OF REVIEW

A. Super. Ct. Civ. R. 12(b)(6).

Super. Ct. Civ. R. 12(b)(6) provides for dismissal of a complaint for "failure to state a claim upon which relief can be granted." When examining the complaint for purposes of a motion to dismiss, the Court accepts all well-pleaded facts as true[14] and draws all inferences in the light most favorable to the plaintiff.[15] If the Court finds that the "plaintiff may recover under any reasonably conceivable set of circumstances susceptible of proof under the complaint, " the motion will be denied.[16]

B. Super. Ct. Civ. R. 56(c).

Super. Ct. Civ. R. 56(c) provides that summary judgment is appropriate where there is "no genuine issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." When considering a motion for summary judgment, the Court's function is to examine the record to determine whether genuine issues of material fact exist "but not to decide such issues."[17] The moving party bears the initial burden of demonstrating that the undisputed facts support his claims or defenses.[18] If the moving party meets its burden, then the burden shifts to the non-moving party to demonstrate that there are material issues of fact to be resolved by the ultimate fact-finder.[19] Summary judgment will be granted if, after viewing the record in the light most favorable to the non-moving party, no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law.[20] If 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 is inappropriate.[21]

IV. MAGELLAN'S MOTION TO DISMISS

In the SAC, Delphi added, inter alia, three additional counts alleging fraud: Count III- Fraudulent Concealment of Overbilling of Heating Charges; Count IV –Fraudulent Billing of Tank Cleaning Charges; and Count V – Fraud in the Inducement.[22] Magellan moves to dismiss Delphi's three fraud claims contained in the SAC. Magellan asserts that Counts V and III fail to state a claim upon which relief may be granted pursuant to Super. Ct. Civ. R. 12(b)(6) and that Count IV is barred by the statute of limitations.

A. Delphi has Sufficiently Pleaded Fraud in Count V of the SAC.

In Count V, the SAC provides that "Magellan emailed Delphi that it 'agreed[d] with your [Delphi's] two changes dealing with improvement costs and truck receipt language'"[23] and that the "statement agreeing to the 'truck receipt language' was a false representation."[24] The SAC also states that "[Tony] Bogle, a key person in the negotiation of the 2011 Agreement and a Magellan employee implicated in the tank heating fraud, admitted that when Magellan said Delphi could deliver oil by truck, Magellan knew that it would not allow Delphi to deliver product by truck."[25] In deposition testimony, Tony Bogle testified: "Q: So you know when you – when this email went out, that if Delphi tried to deliver by truck, Magellan would refuse? A: Yes.[26] The SAC also provides that one week after the 2011 Agreement was executed, "[Tony] Bogle wrote himself a memo detailing the reasons he would give Delphi for denying Delphi the right to deliver to the [Terminal], notwithstanding Magellan had agreed to Delphi's truck receipt language…"[27]

Additionally, the SAC states that "Magellan made its false representation with the intent to induce Delphi to sign the 2011 Agreement, "[28] that "[i]n executing the 2011 Agreement, Delphi justifiably relied on Magellan's statement and the inclusion of the delivery by truck provision into the contract, "[29] and that "Delphi has sustained damages…as a result of Delphi's reliance of Magellan's fraudulent statement and representations."[30]

Magellan argues that Delphi has not made out a prima facie claim for fraudulent inducement regarding the Truck Clause because Delphi has not pleaded that it reasonably relied upon extra-contractual representations by Magellan.[31]Magellan asserts that the alleged misrepresentation that Magellan was "in agreement with [Delphi's proposed] changes [to the 2011 Terminalling Agreement] dealing with…truck receipt language" is not a misrepresentation but a matter of interpretation.[32] Magellan also argues that Delphi's "fraud claim is merely an attempt by Delphi to 'bootstrap' its breach of contract claims into fraud claims.[33]

Delphi argues that it sufficiently pleaded all of the elements of fraud. Delphi asserts that "a claim for fraud can co-exist with a breach of contract claim so long as the fraud claim is based on a promise or misrepresentation collateral or extraneous to the terms of the agreement."[34] Delphi contends that "the May 13, 2011 e-mail chain described in ¶¶48-51 [of the SAC] is indisputably separate from and collateral to the parties' Agreement."[35]

"The general elements of common law fraud under Delaware law are: (1) defendant's false representation, usually of fact, (2) made either with knowledge or belief or with reckless indifference to its falsity, (3) with an intent to induce the plaintiff to act or refrain from acting, (4) the plaintiff's action or inaction resulted from a reasonable reliance on the representation, and (5) reliance damaged the [plaintiff]."[36]

Super. Ct. Civ. R. 9(b) requires a plaintiff to plead fraud with "particularity."[37] "The entire purpose of Rule 9(b) is to put the defendant on notice so that he can adequately prepare a defense."[38] "The 'circumstances' which must be stated with particularity under Rule 9(b) refer to 'the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.'"[39]

Delphi pleads that "Magellan emailed Delphi that it 'agreed[d] with your [Delphi's] two changes dealing with improvement costs and truck receipt language'"[40] and that the "statement agreeing to the 'truck receipt language' was a false representation."[41] The SAC also pleads that "[Tony] Bogle, a key person in the negotiation of the 2011 Agreement and a Magellan employee implicated in the tank heating fraud, admitted that when Magellan said Delphi could deliver oil by truck, Magellan knew that it would not allow Delphi to deliver product by truck."[42]The SAC alleges that "Magellan made its false representation with the intent to induce Delphi to sign the 2011 Agreement, "[43] that "[i]n executing the 2011 Agreement, Delphi justifiably relied on Magellan's statement and the inclusion of the delivery by truck provision into the contract, "[44] and that "Delphi has sustained damages…as a result of Delphi's reliance on Magellan's fraudulent statement and representations."[45] Delphi has alleged all of the elements of common law fraud with particularity. Therefore, the Court finds that Delphi has adequately made out a prima facie case of fraud.

Additionally, the Court finds Magellan's "bootstrapping" argument unpersuasive. Delaware courts have permitted a claim for fraud and breach of contract claim when the fraud claim is based on a "promise collateral or extraneous to the terms [of] an enforceable agreement in place between the parties."[46] In MicroStrategy Inc. v. Acacia Research Corp., 2010 WL 555045, Court of Chancery explained that "a plaintiff 'cannot 'bootstrap' a claim of breach of contract into a claim of fraud merely by alleging that a contracting party never intended to perform its obligations.'"[47] However, the court acknowledged that

…statements of future intent can be "fraudulent misrepresentations" sufficient to form the basis of a fraudulent inducement claim only where the Complaint alleges particularized facts that allow the Court to infer that, at the time the promise was made, the speaker had no intention of keeping it. "Indeed, '[s]tatements of intention ... which do not, when made, represent one's true state of mind are misrepresentations known to be such and are fraudulent.[48]

The Court finds that Delphi has sufficiently alleged that Magellan had no intention of allowing delivery by truck to the Terminal at the time the alleged promise to allow delivery by truck to the Terminal was made. Delphi quotes the deposition testimony of Tony Bogle for the proposition that Magellan knew before adding the truck receipt language to the contract that Magellan would not actually allow Delphi to deliver by truck to the terminal; specifically, Delphi alleges that Tony Bogle testified: "Q: So you know when you – when this email went out, that if Delphi tried to deliver by truck, Magellan would refuse? A: Yes.[49]Additionally, Delphi alleges that Tony Bogle wrote a memo to himself one week after the 2011 Agreement was memorialized that detailed the reasons that he would give to Delphi as to why Magellan would deny Delphi's truck deliveries at the Terminal.[50] Based upon these allegations, a finder of fact could find that, at the time the promise was made, the speaker had no intention of keeping the alleged promise to allow Delphi to deliver by truck to the Terminal. Because the Court finds that Delphi has met the pleading requirements under Super. Ct. Civ. R. 12(b)(6) and Super. Ct. Civ. R. 9(b) to state a claim for fraudulent inducement, Magellan's Motion to Dismiss Count V is DENIED.

B. Delphi has Failed to Plead Fraud in Count III of the SAC.

As part of its breach of contract claim, in ¶8(u) of the SAC, Delphi alleges that "Magellan overbilled Delphi by at least $580, 000 between 2005-11 for the fuel consumed to heat Delphi's oil tanks, and then concealed its overcharges. Delphi confirmed Magellan's overbilling in December, 2014." In addition, in Count III, the SAC states, in relevant part, that "Magellan did not reveal the more than $580, 000 overbill when it answered, under oath, Interrogatory No. 35 of Delphi's Second Set of Interrogatories and falsely alleged that it had corrected every error in its billings to Delphi."[51] Additionally, the SAC provides that "Magellan knew that it had overcharged Delphi…for heating over the period from 2007 through 2010"[52]and that "Magellan billed Delphi for heating charges on a monthly basis under the 2005 Agreement and Delphi paid all those charges."[53] Paragraph 8(r) of the SAC provides that "Magellan tendered to Delphi inaccurate invoices…and Delphi has paid Magellan sums not actually due by relying on the accuracy of the invoices and is entitled to be refunded all amounts overpaid." Delphi claims damages in excess of $580, 000.[54]

Magellan argues that Delphi has failed to state a claim for fraud in Count III of the SAC. Magellan asserts that Delphi's claim fails because Delphi has not alleged that Magellan "made any affirmative representation, or took any action, to prevent Delphi from learning that it was being billed for heating oil according to measurements from meters that Delphi claims were erroneous."[55] Magellan also asserts that "Delphi does not allege that it took any action, or refrained from taking any action, in reliance on any representation or concealment by Magellan."[56]

Delphi argues that it has properly alleged a claim for fraudulent concealment because pleading fraud is not limited to identifying misrepresentations; fraud may also be pleaded by asserting the defendant deliberately concealed facts or remained silent when faced with a duty to speak.[57] Delphi contends that the SAC sufficiently provides that Magellan "committed fraud by concealing that it overcharged and then kept more than $580, 000 of Delphi's money, while at the same time representing to Delphi that 'it had corrected every error in its billings' and demanding that Delphi pay Magellan additional money and interest.[58] Delphi argues that it "acted in reliance on the accuracy of Magellan's 72 detailed monthly heating bills…paid all of them in full and thereby fell victim to Magellan's overbill of $580, 000 and subsequent concealment."[59]

The Delaware Supreme Court has held that "[f]raud does not consist merely of overt misrepresentations. It may also occur through deliberate concealment of material facts."[60] Here, Delphi alleges that Magellan concealed the overbilling and that Magellan overtly misrepresented that it had corrected every error in its billings to Delphi.[61] Delphi also alleges that "Magellan knew that it had overcharged Delphi more than $420, 000 for heating over the period from 2007 through 2010."[62]Therefore, Delphi has satisfied the first two elements of the cause of action regarding alleging a false representation and knowledge of the falsity of the representation.

Where Delphi fails in its allegations is in not alleging 1) that Magellan made the false representations with the intent to induce Delphi to take some action or refrain from taking action; or 2) that Delphi took some action in reasonable reliance on the false representations. Delphi has not pleaded that Magellan intended to induce Delphi to act or refrain from acting based upon the alleged concealment. Exhibit D to the SAC is the January 21, 2011 letter from Alan Cosby to Tony Bogle, both Magellan representatives, that contains the chart that Delphi relies upon to allege overbilling.[63] The chart covers the time period from 2007 through 2010.[64] Based upon that email and chart, at most, Delphi has pleaded that Magellan discovered the alleged overbilling that occurred between 2007 and 2010 on January 21, 2011 and formed the intent to induce on that date. However, there are no well-pleaded facts in the SAC to support Delphi's assertion that Magellan had the intent to induce Magellan to act or refrain from acting after that date.

Delphi must also plead that Delphi took action in reasonable reliance on Magellan's alleged concealment after January 21, 2011. Delphi alleges that "Magellan billed Delphi for heating charges on a monthly basis under the 2005 Agreement and Delphi paid all those charges"[65] and that "Magellan tendered to Delphi inaccurate invoices…and Delphi has paid Magellan sums not actually due by relying on the accuracy of the invoices and is entitled to be refunded all amounts overpaid."[66] However, those assertions address what action Delphi took in response to receiving allegedly inflated invoices but do not address Delphi's actions in response to the alleged concealment of overbilling that occurred after January 21, 2011. Delphi has failed to plead with particularity that it did anything in reliance on Magellan's alleged concealment of the overbilling after January 21, 2011. Instead, Delphi asserts only that Magellan did not unilaterally credit Delphi.[67] The SAC is silent as to Delphi's actions as a result of the alleged concealment.

Similarly, Delphi alleges that the overt misrepresentation that Magellan had corrected all of its billing errors occurred in response to discovery in December 2013.[68] However, Delphi does not allege that Magellan intended to induce Delphi to take any action in response to the overt misrepresentation. Furthermore, Delphi does not allege that Delphi took action in reasonable reliance on the overt misrepresentation.

Because the Court finds that Delphi has not pleaded that Magellan intended to induce Delphi to take some action or refrain from taking action based upon alleged fraudulent statements and that Delphi has not pleaded that Delphi did anything in reasonable reliance upon Magellan's alleged fraudulent statements, Delphi has failed to make out a prima facie claim of common law fraud and Magellan's Motion to Dismiss Count III is GRANTED.

C. Dismissal of Count IV is Premature.

In Count IV, the SAC states that "Magellan fraudulently billed Delphi for tank cleaning charges that were Magellan's responsibility and purposefully altered bills to conceal the fact that it was passing off its charges to Delphi."[69] The SAC also provides that "Magellan overbilled Delphi for the costs relating to the cleaning of tanks leased to Delphi in violation of Clauses 2.7 and 2.8 of Schedule A of the 2005 Agreement"[70] and that "Magellan breached Clauses 2.7 and 2.8 of Schedule A of the 2005 Agreement by arranging for tank cleaning services to be performed in a manner to minimize the costs of the cleaning for which Magellan was responsible and maximize the costs for which Delphi was responsible."[71]

Magellan argues that Count IV for Fraudulent Billing of Tank Cleaning Charges is barred by the statute of limitations. Magellan asserts that the three-year statute of limitations has run because the underlying invoices that Delphi relies upon to support its claim were issued between 2007 and 2010.[72] Magellan contends that Delphi knew of the invoices in September 2013, if not earlier, when it filed its First Amended Complaint that included a similar allegation.[73]

Delphi argues that the three-year statute of limitations is tolled by the Time of Discovery Rule. Specifically, Delphi asserts that the "concealment and fraud" provision of the Rule applies because Magellan "deceitfully altered cleaning bills."[74] Delphi alternatively claims that the "inherently unknowable and blamelessly ignorant" provision of the Rule applies. Delphi contends that it was "not aware that Magellan was altering its bills, rendering false invoices or colluding with the third party contractor to create fictitious charges" until Magellan produced documents during discovery in 2014 and Delphi deposed Magellan witnesses in November and December 2014.[75]

The statute of limitations for claims for fraud is three years under 10 Del. C. § 8106.[76] However, the statute of limitations may be tolled by the Time of Discovery Rule under specific circumstances.[77]

Generally, a cause of action in tort "accrues" at the time the tort is committed.... Ignorance of the cause of action will not toll the statute [of limitations], absent concealment or fraud, or unless the injury is inherently unknowable and the claimant is blamelessly ignorant of the wrongful act.... In the latter circumstance, the statute of limitations begins to run upon the discovery of facts "constituting the basis of the cause of action or the existence of facts sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued, would lead to the discovery" of such facts.[78]

In Thomas v. Capano Homes Inc., 2015 WL 1593618, the Court recently denied a Motion to Dismiss where the parties disagreed as to when the statute of limitations began to accrue. The Court held that

"[T]he Court will not adjudicate contested issues of fact on a motion to dismiss, nor will it deem a pleading inadequate under Rule 12(b)(6) simply because a defendant presents facts that appear to contradict those plead by the plaintiff." It is premature for the Court to dismiss Plaintiffs' claim as time-barred because, without discovery, it is unclear when the statute of limitations began to accrue, and whether the statue of limitations is tolled by the Time of Discovery Rule.[79]

The parties have engaged in extensive discovery; however, the limited facts contained in the pleadings are unclear as to when the statute of limitations began to accrue and if the Time of Discovery Rule tolls the statute of limitations. In the SAC, Delphi contends that "Magellan fraudulently billed Delphi for tank cleaning charges that were Magellan's responsibility and purposefully altered bills to conceal the fact that it was passing of its charges to Delphi."[80] Additionally, Delphi alleges that "Magellan overbilled Delphi for the costs relating to the cleaning of tanks leased to Delphi in violation of Clauses 2.7 and 2.8 of Schedule A of the 2005 Agreement"[81] and "Magellan breached Clauses 2.7 and 2.8 of Schedule A of the 2005 Agreement by arranging for tank cleaning services to be performed in a manner to minimize the costs of the cleaning for which Magellan was responsible and maximize the costs for which Delphi was responsible."[82]

Although Magellan argues that the underlying invoices cover the time period from 2007 through 2010, the pleadings do not establish a timeframe such that the Court can determine if the claim is barred by the statute of limitations. Therefore, Magellan's Motion to Dismiss Count IV is DENIED.

V. MAGELLAN'S MOTION FOR PARTIAL SUMMARY JUDGMENT

Magellan's request for summary judgment can be grouped into three parts for purposes of the Court's analysis: there are six arguments involving breach of contract analysis, an argument concerning breach of the implied covenant of good faith and fair dealing and an argument regarding damages.

Magellan's seeks summary judgment on some of Delphi's breach of contract claims on the grounds that: 1) Delphi's claim in ¶8(k) of the SAC that Magellan breached the PSA fails as a matter of law; 2) Delphi cannot produce evidence from which a reasonable trier of fact could find that Magellan breached the 2005 Agreement by failing to account for 1, 100 barrels discharged from the vessel Asphalt Victory as alleged in ¶8(d) of the SAC; 3) Delphi cannot produce evidence from which a reasonable trier of fact could find that Magellan's refusal to accept product from the vessel Asphalt Seminole was a breach of the 2005 Agreement as alleged in ¶8(o) of the SAC; 4) Delphi cannot produce evidence from which a reasonable trier of fact could find that Magellan breached the 2011 Agreement by failing to credit Delphi for product in the Conectiv pipeline as alleged in ¶8(p) of the SAC; 5) Delphi cannot produce evidence from which a reasonable trier of fact could find that Magellan's refusal to allow delivery of fuel by truck to the Terminal constitutes a breach of the 2011 Agreement as alleged in ¶8(e) of the SAC; and 6) Delphi cannot produce evidence from which a reasonable trier of fact could find that Delphi is entitled to recover the alleged loss of 5, 000 barrels under the 2005 Agreement as alleged in ¶8(a) of the SAC.

Magellan also seeks summary judgment on Count II of the SAC for breach of the duty of good faith and fair dealing because Magellan argues that Count II fails as a matter of law. Magellan requests summary judgment to enforce Clause 4.2 of Schedule A of the 2005 and 2011 Agreements, the limitation of damages provision, arguing that Delphi is not entitled to consequential damages per the plain terms of the Agreements.

A. Breach of Contract Claims

Magellan's first six arguments concern subsections of ¶8 of the SAC. The common prayer for relief is that the Court determine that Delphi cannot produce evidence from which a reasonable factfinder could find that Magellan breached various provisions of the Agreements. Although Magellan, in its Opening Brief, frequently frames the issue as a "failure to state a claim, " the Court will examine the factual record before it on summary judgment.

To prevail on a claim for breach of contract, a plaintiff must show that a contract existed, that the contract obligation was breached and that Plaintiff suffered damages as a result of the breach.[83] For purposes of summary judgment, Super. Ct. Civ. R. 56(c) "mandates the entry of summary judgment…against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."[84] Consequently, if the factual record reveals that Delphi has not made a showing as to an element ...


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