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Conaway v. New Hope Tile, LLC

Court of Common Pleas of Delaware, New Castle

May 31, 2017


          Submitted: March 8, 2017

          Douglas A. Shachtman, Esquire The Shachtman Law Firm Attorney for Plaintiffs

          Kevin S. Mann, Esquire Cross & Simon, LLC Attorney for Defendants


          Alex J. Smalls, Chief Judge.

         The matter before the Court involves an alleged breach of contract arising from a general contractor's agreement for renovations on a house. Racheal Conaway ("Racheal") [1]and Timothy Conaway ("Timothy") (collectively, "Plaintiffs") entered into a contract with New Hope Tile, LLC ("New Hope") and Michael Czerwinski, trading as New Hope Tile LLC & Construction, ("Czerwinski") (collectively, "Defendants") to renovate Plaintiffs' master bathroom and powder room. Plaintiffs allege Defendants failed to complete the work in accordance with the terms of the contract and in a workmanlike manner. Additionally, Plaintiffs allege the electrical and plumbing work was not performed by licensed personnel and Defendants did not have such licenses to perform the work.

         On March 8, 2017, the Court held trial on the matter. The evidence consisted of testimony from Henry White ("White"), [2] Racheal, and Czerwinski. The parties also submitted documentary evidence for the Court to consider. At the conclusion of trial, the Court reserved decision. This is the Court's decision after trial.


         This dispute involves a contract for renovations to a private residence located at 2301 Capital Trial, Newark, DE 19702. Timothy is the recorded owner of the property, but does not live there. Timothy's daughter, Racheal, resides at the property along with Timothy's elderly mother, Elizabeth. Czerwinski is a general contractor, who has been employed in the residential construction business since 1986. Czerwinski created New Hope Tile in 1996, and formed New Hope Tile, LLC in 2008. New Hope Tile, LLC has two employees, including Czerwinski who is the owner and chief operating officer.

         Racheal, with the approval of Timothy, sought to renovate the property's master bathroom and powder room. The master bathroom is used by Racheal, while Elizabeth uses the powder room. In February 2016, Racheal contacted New Hope to request a bid for the proposed renovations. Czerwinski meet with Racheal at the property, and the parties entered into a written contract where New Hope would perform the renovations for $4, 925.00.[4] The agreement included an eighteen month warranty on installation.[5] The work to be performed under the agreement, as set forth in the invoice, is as follows:

"[R]emove and replace all walls in [powder room]; haul away to dump; supply new drywall and finish; homeowner will paint; also install [vinyl] floor supplied by you;
Install new toilet, new vanity, and new light; also new plumbing for sink faucet all supplied by you for [powder room];
[R]emove all walls and ceiling in upstairs [master] bathroom, walls have tile; also remove mud floor and tile; haul all to dump;
[Supply] and [install] new drywall on walls and ceiling finish for paint; homeowner will paint;
Frame up new about 48 inch shower and tile homeowner to supply tile; we supply all building materials;
Center drain and replace diverter (water control supplied by you); also hook up sink and toilet supplied by you;
[M]ake shower pan on floor; we supply everything except tile;
[F]rame up shelves on other side of shower we supply everything; and Install of new [vinyl] floor, new vanity, (you supply) and new door (we supply door) at entrance"[6]

         During the course of the renovations, New Hope billed Racheal three additional amounts for further repairs to the master bathroom and powder room. These additional repairs included: (1) replacing the door to the powder room; (2) removing the drop ceiling and drywall in the powder room; (3) installing insulation behind the walls in the powder room; (4) removing mold in the master bathroom; (5) removing rotting floor in the master bathroom; and (6) installing a ceiling fan and shower seat in the master bathroom.[7] New Hope charged Racheal $3, 260.00 for these additional repairs, for which she paid in full. All of the renovations were performed by Czerwinski, except for repairs to the master bathroom's ground-fault interrupter which were performed by a licensed electrician.

         Pursuant to the terms of the contract, New Hope was to finish the bathroom walls for Plaintiffs to paint. Racheal testified that when Plaintiffs went to paint the bathrooms, they inspected Defendants' work and noticed several defects. These defects included a "hole under the sink, hole in floor, [the sink leaked], spackling was incomplete and not sanded, molding around the window [and] caulking not [completed] . . . shelves were never sanded so that they could be painted, cuts in drywall that [were] never spackled, and the [powder room's] heat register [did] not fit."[8] Also, Defendants did not install the ceiling fan in the master bathroom.[9] On March 21, 2016, Racheal summarized her complaints in an email and requested Czerwinski address the outstanding issues.[10]

         On March 22, 2016, Czerwinski, on behalf of New Hope, emailed Racheal stating that New Hope was sorry that Plaintiffs were unhappy with the renovations.[11] Czerwinski explained that when New Hope contracted to get the walls ready for paint they "mean put two coats of spackle that's it. No sanding [or] touch up no anything, those are part of the painting [procedure] I made that clear."[12] Nevertheless, Czerwinski stated that Defendants were willing to patch the hole under the sink and repair any leaks.[13]

         Czerwinski subsequently met with Plaintiffs at the property to address their complaints. Racheal invited her cousin to attend the meeting because of his prior experience with home renovations. Racheal's cousin identified several issues with Defendants' renovations that were either completed improperly or were incomplete. Racheal testified that Czerwinski became defensive and argumentative when she questioned his work. Ultimately, Czerwinski stated he would return in May to install the ceiling fan for the master bathroom and make some minor repairs; however, Defendants never returned to install the ceiling fan or make the promised repairs.

         On May 15, 2016, Racheal testified that she emailed Czerwinski stating that she was unhappy with the work done by Defendants.[14] In addition to her original grievances, Racheal indicated Defendants failed to remove the old ceiling in the master bathroom, the master bathroom shower tiles were installed unevenly, and the door casing to the powder room was never completed.[15] Furthermore, Racheal indicated in the email that she would pursue legal action, unless she was refunded $6, 229.00. The next day, Defendants responded stating they completed all of the renovations in accordance with the terms of the contract. Defendants further urged Racheal to "drop this ridiculous claim, " or they would file a counter-claim for work New Hope performed for free.[16]

         On June 26, 2016, Racheal hired Henry W. White, Inc. ("HWI") to inspect work done by Defendants in the master bathroom and powder room. Following HWI's inspection of the powder room, it reported that: (1) New Hope did not remove the old base trim, but instead butted a new drywall to it; (2) New Hope failed to install insulation behind the old base trim, because it was never removed; (3) New Hope failed to have the walls finished for painting; (4) New Hope never finished installing the door casing; and (5) New Hope reinstalled Plaintiffs' old light fixture instead of a new one.

         HWI's inspection of the master bathroom revealed and reported that: (1) New Hope failed to remove the old mud floor and ceiling; (2) New Hope failed to install the shower drain in the center, and instead installed the shower drain on a slope, towards the end of the shower; (3) New Hope failed to install the shelves; (4) New Hope failed to remove all of the rotted floor around the toilet; (5) New Hope damaged the toilet flange when trying to remove the rotted floor around the toilet; (6) New Hope incorrectly wired the ground-fault interrupter;[17] (7) New Hope's installation of the shower door was out of plumb; and (8) New Hope never installed a shower seat and ceiling fan. Additionally, HWI stated New Hope cracked a section of galvanized pipe when Czerwinski installed the drain to the master bathroom shower, which caused water to leak onto Plaintiffs' dining room ceiling. Furthermore, upon review of New Hope's invoices, HWI stated New Hope charged Racheal for additional repairs that were already provided for under the terms of the original invoice, including replacing the drain in the master bathroom and purchasing a dumpster for trash removal.

         HWI estimated it would cost $1, 145.00 to repair Defendants' renovations to the powder room, and $8, 828.71 to repair the master bathroom. Additionally, HWI determined it would cost $500.00 to repair the water damage to the master bathroom. Based upon this report, Racheal hired HWI who subsequently completed the repairs to the property.


         It is the Plaintiffs' contentions that Defendants did not complete the renovations in accordance with the terms of their contract, and the work that was completed was done in a non-workmanlike manner. Plaintiffs also contend some of the proposed renovations included electrical and plumbing work that required licensed craftsmen, and Defendants were not licensed to make such repairs. Accordingly, Plaintiffs bring causes of action for (1) breach of contract; (2) breach of warranty; (3) consumer fraud; (4) deceptive practices in consumer contracts; (5) negligence; and (6) common law fraud.

         Defendants contend they completed the renovations in accordance with the terms of the contract and raise a number of affirmative defenses. Defendants also argue the substance of this litigation involves an alleged breach of contract, and Plaintiffs cannot bring an action sounding in tort for claims under contract. Furthermore, because Plaintiffs are suing to enforce rights under the Racheal-New Hope Contract, Defendants argue Timothy lacks standing because he is not a party to the original contract. Defendants also contend Czerwinski is not a proper party to this litigation. Defendants maintain New Hope Tile, LLC & Construction is a separate and distinct entity, i.e. New Hope. Defendants contend at all relevant times Czerwinski acted in his official capacity as owner and chief operating officer of New Hope. Furthermore, Defendants maintain Czerwinski never intended to be personally liable for work performed on behalf of New Hope. For these reasons, Defendants argue the Court must dismiss Czerwinski as a party to this litigation and enter judgment if it finds liability only as to New Hope.


         During the trial, the Court sat as the sole trier of fact. Therefore, it is the Court's responsibility to assess the credibility of the testifying witnesses and, where there is a conflict in the testimony, to reconcile these conflicts, "if reasonably possible[, ] so as to make one harmonious story."[18] In doing so, the Court takes into consideration the demeanor of the witnesses, their apparent fairness in giving their testimony, their opportunities in hearing and knowing the facts about which they testified, and any bias or interest they may have concerning the nature of the case.[19]

         In civil cases, the claimant bears the burden to prove each and every element of its claim by a preponderance of the evidence.[20] The party on which the greater weight of the evidence is found is the side on which the preponderance of the evidence exists. [21]

         As a preliminary matter, the Court will first address whether Timothy and Czerwinski are proper parties to the proceedings. Generally, a stranger to a contract cannot enforce rights under the contract.[22] However, a non-party may enforce the contract as a third party beneficiary if the following is established: (1) the contracting parties intended to benefit the third party; (2) the benefit is intended to be a gift or in satisfaction of a pre-existing obligation; and (3) the intent to benefit the third party is a material part of the contracting parties' purpose in entering into the contract.[23] If there is no intent by the contracting parties to confer a benefit, a third party who receives such a benefit under the contract is merely an incidental beneficiary with no enforceable rights.[24]

         In order to determine whether a non-party can enforce a contract as a third party beneficiary, the Court must look to the language of the contract.[25] The relevant contract in this matter does not mention Timothy, either by name or general reference. Although a third party beneficiary need not be specifically named or referenced in a contract, the contracting parties must intend to confer a benefit to a third party, and that intention must be a material part of the contract's purpose.[26] Upon review of the relevant contract, I find that Racheal and New Hope did not intend to confer a benefit to Timothy when they entered into a contract for renovations to the property. Timothy is merely an incidental beneficiary, who benefits from the Racheal-New Hope Contract by having renovations done to a property he owns.[27] As such, Timothy does not acquire any rights to enforce the contract. Therefore, Timothy cannot bring a cause of action based upon the Racheal-New Hope Contract, and as such his claims must and are dismissed.

         Furthermore, Timothy cannot bring a cause of action based upon negligence. In order for Timothy to prevail on a claim of negligence, he would have to satisfy the elements of negligence: duty, breach, causation, and harm.[28] In this case, there are no facts which would demonstrate how Timothy suffered any harm caused by Defendants. Any damage to the property caused by Defendants' renovations was ultimately repaired by HWI, at no cost to Timothy. Timothy has failed to show continued damages as a result of Defendants' conduct; therefore, Timothy cannot succeed on a claim of negligence. Additionally, in order to prevail on a claim based upon common law fraud, Timothy would have to establish the fact that Defendants made a misrepresentation of material fact to Timothy.[29] However, the record reflects the only communications between the parties regarding the renovations occurred between Defendants and Racheal. There is no evidence that Defendants made any statements, yet alone false statements, to Timothy; therefore, I find no basis for a claim based upon common law fraud. Consequently, because Timothy cannot bring a valid claim based upon tort or contract, he is not a proper party to this litigation.

         With regard to Czerwinski, a review of the documents indicates he signed the initial contract as "New Hope Tile LLC & Construction." In these documents, Czerwinski is referred to in his official capacity as the owner of New Hope, a Delaware limited liability company. Under Delaware's Limited Liability Company Act,

"the debts, obligations and liabilities of a limited liability company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the limited liability company, and no member or manager of a limited liability company shall be obligated personally for any such debt, obligation or liability of the limited liability company solely by reason of being a member."[30]

         An exception to the steadfast rule exists when a member of a limited liability company signs a contract on his own behalf, rather than for the company.[31]

         Turning to the matter before the Court, the facts support the conclusion that Czerwinski was acting in his official capacity as owner and chief operating officer of New Hope when he signed the contract and performed the renovations to Plaintiffs' property. Plaintiffs have failed to provide the Court with sufficient evidence to suggest Czerwinski can be held personally liable for actions taken on behalf of New Hope. Therefore, because Czerwinski was acting as an agent for a disclosed principal- i.e. New Hope- ...

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