RICHARD A. HUGHES and H. KAREN HUGHES, Plaintiffs,
IMPERIAL HOME REMODELING LLC and GIOVANNI ESPOSITO a/k/a JOHN ESPOSITO, Defendants.
Submitted: May 16, 2018
Charles E. Butler Judge
before me a motion to dismiss filed by defendant Giovanni
Esposito a/k/a John Esposito ("Esposito") in this
matter. As briefly as it can be stated, this is an action
brought by Karen and Richard Hughes, homeowners in Newark,
DE. who claim damages from work done by Mr. Esposito's
company, Imperial Home Remodeling, LLC
("Imperial"). The Hughes' complaint was filed
in the Court of Common Pleas, alleging damages of $49, 000.
Upon counsel for the defendants' entry of appearance, the
case was transferred to this Court.
motion to dismiss points out that the signed contract between
the Hughes's and Esposito was actually with Imperial and,
since Esposito only signed the contract on behalf of Imperial
and not in his own capacity, there can be no personal
liability as to him and he therefore should be dismissed from
plaintiffs concede that two of their claims - for breach of
contract and breach of warranty ~ are limited to the legal
entity that signed the contract. Plaintiffs argue, however,
that their remaining counts, for negligence, consumer fraud,
and deceptive practices do not require dismissal because
Esposito, even if acting as agent for Imperial, may still be
liable for his own conduct, regardless whether he was acting
as an agent for Imperial.
for plaintiffs position can be found in the Restatement
(Third) of Agency, §7.01, which states that "Unless
an applicable statute provides otherwise, an actor remains
subject to liability although the actor acts as an agent or
an employee, with actual or apparent authority, or within the
scope of employment."
while the "corporate veil" may shield defendant
Esposito from individual liability for damages caused by his
limited liability company, it does not shield him from his
own torts, whether committed in his individual capacity or as
agent for his limited liability company. For example, in
State ex rel. Brady v. Preferred Florist Network,
Inc.,  Vice Chancellor Lamb found the pleadings
in a consumer fraud complaint sufficient where the defendant,
acting through a New Jersey corporation, was alleged to have
engaged in deceptive business practices, saying the
individual defendant would not be "shielded from
liability simply because he was acting in a corporate
capacity when he allegedly participated in conduct violative
of the CFA and the UDTPA."
points the Court to the "fine print" of the
Hughes/Imperial home improvement contract and a provision
that defendant calls an "Integration Clause" that
excluded reliance on representations not contained in the
agreement. The Integration Clause may be given effect, but it
may not. We see several cases that have read such clauses
quite narrowly. And while the exact nature of the
representations and defects are not fleshed out at this early
stage of the case, we note that defendants' answer avers
that the contract was not completed because Imperial was
"prevented from completing work by the City of
Newark." This is consistent with the
representations at oral argument that Imperial is not
licensed to do business in Newark, DE. That may, or may not,
be relevant to the representations made at the time of
contracting, but it does demonstrate that dismissing
defendant at this stage would be inappropriate.
all of this adds up to summary judgment in favor of either
defendant is too early to tell. The motion before the Court
is to dismiss John Esposito in his individual capacity, which
the Court will do, as to the two contract counts. The Court
will not dismiss tort/misrepresentation counts as the parties
must develop a record upon which such claims can be examined.
As to defendants' integration clause arguments, the Court
cannot rule as a matter of law that the mere presence of such
a clause in a contract bars plaintiffs from presenting their
evidence of fraud or misrepresentation. Defendants may raise
their arguments again upon full discovery, assuming there are
by then no factual issues in dispute.
foregoing reasons, Defendant's Motion to Dismiss is
GRANTED as to Counts 1 and 2 and
DENIED as to the remaining Counts.
IS SO ORDERED.
791 A.2d 8, 21-22 (Del. Ch.