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Griffith v. Energy Independence, LLC

Superior Court of Delaware

December 13, 2017

DEBORAH GRIFFITH, Plaintiff,
v.
ENERGY INDEPENDENCE, LLC JAMES WATSON, and SOUTHLAND INSULATORS OF DELAWARE, LLC d/b/a DELMARVA INSULATION COMPANY, Defendants.

          Submitted: September 15, 2017

         Upon Defendants' Motion to Dismiss, Granted in part

          Robert C. Collins II, Esq. of SCHWARTZ & SCHWARTZ, Dover, Delaware, Raeann Warner, Esq. of JACOBS & CRUMPLAR, P.A., Wilmington, Delaware; Attorneys for Plaintiff.

          Patrick M. McGrory, Esq., and Jason J. Cummings, Esq. of TIGHE & COTTRELL, P.A., Wilmington, Delaware; Attorneys for Energy Independence and James Watson.

          MEMORANDUM OPINION

          J. LeGROW

         In August 2011, Energy Independence ("Energy") and its agent James Watson (collectively, the "Moving Defendants") supervised the insulation and encapsulation of Deborah Griffith's ("Plaintiff) crawlspace. Energy subcontracted with Southland Insulators ("Southland"), a separate entity and non-moving defendant, to perform the actual work. Southland completed the work without a dehumidifier or any other form of moisture-prevention. Plaintiff alleges moisture in the crawlspace promoted mold growth that caused her to contract lung disease. Plaintiff brought suit for breach of contract, negligence, breach of the implied warranty of good quality and workmanship, and breach of the implied covenant of good faith and fair dealing. Moving Defendants contend all claims, except the breach of contract claim, should be dismissed.

         This case presents four questions: (i) whether plaintiff can sue the Moving Defendants in tort when the claim is based on the parties' contract; (ii) whether Energy owed plaintiff an implied warranty of good quality and workmanship when it only supervised the renovation; (iii) whether Energy breached the implied covenant of good faith and fair dealing; and (iv) whether Watson personally may be held liable for his actions as Energy's agent.

         I find Energy's alleged negligent performance of the work it undertook permits plaintiff to sue in tort, and that Energy cannot evade its warranty of good quality and workmanship by subcontracting with Southland. The amended complaint, however, fails to support a claim that Moving Defendants breached the implied covenant of good faith and fair dealing. Finally, the lack of factual allegations suggesting misfeasance or active negligence requires dismissal of Plaintiffs negligence claim against Watson. My reasoning follows.

         FACTUAL AND PROCEDURAL BACKGROUND

         The following facts are drawn from the amended complaint. In August 2011, Watson, through Energy, performed a "Home Performance Assessment" for Deborah Griffith. Watson recommended encapsulation and insulation of the crawlspace to improve the home's energy conservation. After the assessment, Griffith and Energy entered into a contract in which Energy agreed to supervise and oversee the renovations. Energy then contracted with Southland to renovate Plaintiffs crawlspace. Southland completed the renovation in August 2011. At no time did either company recommend or propose installing a dehumidifier or other moisture-reducing device as part of the renovation. In August 2015, Plaintiff learned a dehumidifier is necessary to prevent mold growth in insulated crawlspaces. Plaintiff alleges she acquired mold-related lung disease due to the growth of mold in her crawlspace. In addition to physical injuries, Plaintiff suffered economic loss due to injury-related lost wages.

         On July 25, 2017, Plaintiff filed this action. In the original complaint, she asserted claims against all defendants for negligence, as well as claims against Energy and Southland for breach of the implied warranty of good quality and workmanship and breach of the implied covenant of good faith and fair dealing. Moving Defendants then filed a motion to dismiss. After the Court granted Plaintiffs motion to amend, Plaintiff filed an amended complaint that added a breach of contract claim against Energy and Southland. Moving Defendants then filed a second motion to dismiss Plaintiffs claims for negligence, breach of the implied warranty of good quality and workmanship, and breach of the implied covenant of good faith and fair dealing, as well as all claims against Watson.

THE PARTIES' CONTENTIONS

         Plaintiff claims all Defendants negligently insulated her crawlspace by failing to install a dehumidifier during the renovation. Plaintiff also claims Energy and Southland breached their implied warranty of good quality and workmanship because they failed to perform the renovation in a reasonably workmanlike manner. Finally, Plaintiff alleges Energy and Southland breached the implied covenant of good faith and fair dealing by negligently insulating and encapsulating the crawlspace.[1]

         In response, Moving Defendants argue Plaintiff cannot sue for negligence because the claim is based entirely on the parties' contract. Moving Defendants also move to dismiss Plaintiffs claim for breach of the implied warranty of good quality and workmanship because they did not perform the renovation of the crawlspace. They argue liability for the implied warranty lies solely with Southland, who performed the actual renovation. Moving Defendants further argue Plaintiffs amended complaint lacks a sufficient factual basis for a claim of breach of the implied covenant of good faith and fair dealing. Lastly, Moving Defendants argue all claims against Watson should be dismissed because he acted only as Energy's agent and cannot be held personally liable.

ANALYSIS

         On a motion to dismiss, the Court must determine whether the "plaintiff may recover under any reasonably conceivable set of circumstances susceptible of proof."[2] "If [the plaintiff] may recover, the motion must be denied."[3] A court may grant the motion if "it appears to a reasonable certainty that under no state of facts which could be proved to support the claim asserted would plaintiff be entitled to relief."[4] When applying this standard, the Court will accept as true all non- conclusory, well-pleaded allegations.[5] In addition, "a trial court must draw all reasonable factual inferences in favor of the party opposing the motion."[6]

         A. The parties' contract does not preclude Plaintiffs negligence claim because the amended complaint alleges negligent performance of contract.

         Moving Defendants argue Plaintiffs negligence claim should be dismissed because Plaintiff cannot sue in tort when the claim is based entirely on breach of contract.[7] This argument is inconsistent with this Court's application of the Restatement (Second) of Torts, which allows contracting parties to sue for negligent performance of contractual obligations.

Section 323 of the Restatement (Second) of Torts provides:
One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other's person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if (a) his failure to exercise such care increases the risk of such harm, or (b) the harm is suffered because of the other's reliance upon the undertaking.[8]

         In Haynie v. Sheldon[9] this Court applied Section 323 to find the defendant water supply company was negligent when it failed to provide adequate water supply and water pressure to permit the plaintiff to extinguish the fire. The Court held that "[h]aving undertaken this contractual duty, the risk of harm resulting from failure to use reasonable care to supply adequate water to fight fires is obvious."[10] In other words, the Court held a party to a contract may bring a negligence claim when the other party fails to use reasonable care when performing its contractual duty.[11]

         Additionally, in the Home Owner's Protection Act (the "Act"), the General Assembly "specifically provided for tort actions seeking to recover damages resulting from negligent [improvement] of residential property to go forward."[12] The Act states:

No action based in tort to recover damages resulting from negligence in the construction or manner of construction of an improvement to residential real property and/or in the designing, planning, supervision and/or observation of any such construction or manner of construction shall be barred ...

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