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National Union Fire Insurance Company of Pittsburgh, Pa v. Newark Recycling Center Inc.

Superior Court of Delaware

September 26, 2019

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA as Assignee and Subrogee of Kratos Defense & Security Solutions, Inc., Plaintiff,

          Submitted: August 21, 2019

          David W. Giattino, Esquire; McElroy, Deutsch, Mulvaney, & Carpenter, LLP, Attorney for Plaintiff.

          Monica T. Holland, Esquire; McElroy, Deutsch, Mulvaney, & Carpenter, LLP, One Perm Center - Suburban Station, 1617 John F. Kennedy Blvd. Attorney for Plaintiff.

          Roger D. Landon, Esquire; Murphy & Landon, Attorney for Defendant.




         Before the Court is Defendant's Renewed Motion for Summary Judgment. For the reasons set forth in this Opinion, Defendant's Motion is GRANTED.


         This litigation arises out of transactions that occurred between Mark Spinden ("Spinden"), his son, Ryan Spinden, and Newark Recycling Center, Inc. ("NRC" or "Defendant"). Spinden was the warehouse manager of Kratos Defense & Security Solutions, Inc. ("Kratos") and used his position as warehouse manager to purchase $529, 802.72[1] of copper wire.[2] He would falsify inventory records, steal the material from Kratos, and sell it to NRC as scrap metal.[3] Spinden would arrive at NRC's facility, drive a company truck, and represent himself as the "purchasing MGR" for Kratos.[4]

         NRC recorded fifty-three transactions with Mark Spinden and five transactions with his son, Ryan Spinden, between June 11, 2012 and July 24, 2014.[5]Each recorded transaction identifies the date and time of the purchase, the purchase number, the item description, and the amount NRC paid for the material.[6] As mandated by law, NRC records this information any time they purchase a precious metal, including copper.[7]

         Mark and Ryan Spinden pled guilty to criminal charges related to the theft on July 7, 2016, and January 20, 2016, respectively.[8] On April 30, 2018, National Union Fire Insurance Company of Pittsburgh, PA ("Plaintiff) filed a subrogation suit for conversion and unjust enrichment against NRC.

         Recognizing the three year statute of limitations to file their litigation, the Plaintiff asserts that Spinden picked up 30, 000 feet of copper wire purchased by Kratos on April 28, 2015 and opines that because there are other instances of Spinden picking up wire and then selling that wire to NRC within several days, it is a fair inference for the jury to conclude that he sold the wire to NRC within several days of the 2015 purchase.[9] If so, this would bring the action within the statute of limitations. Despite Plaintiffs assertion that Spinden sold the copper wire to NRC shortly after the 2015 purchase, there are no records connecting NRC to the purchase, and Plaintiff has not offered any evidence to support this allegation. At a hearing held on January 3, 2019 on Defendant's initial Motion for Summary Judgment, the Court denied the Motion to provide Plaintiff additional time to discover such evidence. This is the Court's decision on the Defendant's Renewed Motion for Summary Judgment.


         In reviewing a motion for summary judgment pursuant to Superior Court Civil Rule 56, the Court must determine whether any genuine issues of material fact exist.[10] The moving party bears the burden of showing that there are no genuine issues of material fact, such that he or she is entitled to judgment as a matter of law.[11] In reviewing a motion for summary judgment, the Court must view all factual inferences in a light most favorable to the non-moving party.[12] Where it appears that there is a material fact in dispute or that further inquiry into the facts would be appropriate, summary judgment will not be granted.[13]


         A. The Statute of Limitations Bars Plaintiffs Claims

         The statute of limitations for a conversion claim expires three years from when the cause of action accrued.[14] The cause of action accrues at the time the injury occurs, "even if the plaintiff is ignorant of the cause of action."[15] This statute applies to Plaintiffs unjust enrichment claim, as well.[16] Kratos, and therefore Plaintiff, had three years from the last transaction between Spinden and NRC to bring the litigation.

         There are limited exceptions in which the statute of limitations may be tolled: (1) fraudulent concealment, (2) inherently unknowable injury, and (3) equitable tolling.[17] The party asserting that tolling applies bears the "burden of pleading specific facts to demonstrate that the statute of limitations was, in fact, tolled."[18]These exceptions permit tolling "where the facts underlying a claim were so hidden that a reasonable plaintiff could not timely discover them."[19] None of these exceptions is applicable to the instant case.

         B. Fraudulent Concealment

         The statute of limitations will be tolled if a defendant fraudulently concealed facts that would have put plaintiff on notice of the cause of action.[20] This requires "an affirmative act of concealment by a defendant . . . that prevents a plaintiff from gaining knowledge of the facts" or an act of "misrepresentation that is intended to put a plaintiff off the trail of inquiry."[21]

         In the instant matter, there is nothing to suggest that the Defendant engaged in any affirmative act of concealment. NRC complied with all statutory reporting procedures and requirements for scrap metal businesses and entered all required information into Rapid, the state police system.[22] Additionally, there is no evidence that NRC had knowledge of Spinden's theft from Kratos.[23] NRC was "[n]ot at all suspicious" that Mark Spinden was selling thousands of pounds of copper because NRC has "numerous accounts that sell thousands of pounds all of the time."[24]Furthermore, Spinden altered the metal so that it did not appear new and instead "looked like scrap."[25] While NRC paid Mark Spinden in cash, per his request, this too was within normal business practices, as approximately ninety percent of their customers request to be paid in cash.[26]

         Despite allegations that "Defendant conspired with the Spindens," Plaintiff has offered no evidence to support this position.[27] The fact that Kratos continues to maintain a business relationship selling excess wire to the Defendant strongly suggests that Kratos does not believe NRC was involved with Spinden's theft.[28]Accordingly, the Court finds no ...

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