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Kiss Electric, LLC v. Conboy & Mannion Contracting, Inc.

Superior Court of Delaware

October 9, 2019

KISS ELECTRIC, LLC, Plaintiff,
v.
CONBOY & MANNION CONTRACTING, INC, and MID-ATLANTIC ELECTRICAL SERVICE, INC, Defendants.

          Submitted: July 12, 2019

         Defendants' Motions to Dismiss Denied in Part; Granted in Part

          W. Christopher Componovo, Esquire, Esquire of Kimmel & Silverman, P.C., Wilmington, Delaware; attorney for Plaintiff.

          Ryan M. Ernst, Esquire of O'Kelly Ernst & Joyce, LLC, Wilmington, Delaware; attorney for Defendant Conboy & Mannion Contracting, Inc.

          Dean A. Campbell, Esquire of the Law Office of Dean A. Campbell, P.A., Georgetown, Delaware; attorney for Mid-Atlantic Electrical Service, Inc.

          ORDER

          William L. Witham. Jr. Resident Judge.

         INTRODUCTION

         Presently before the Court are Defendants Conboy and Mannion Contracting, Inc. (hereinafter "Defendant C&M") and Mid-Atlantic Electrical Service, Inc. (hereinafter "Defendant Mid-Atlantic) and their Motions to Dismiss Plaintiff Kiss Electric, LLC's (hereinafter "Plaintiff) breach of contract, unjust enrichment, and tortious inference claims[1] against both Defendants pursuant to Superior Court Rules of Civil Procedure Rule 12(b)(1).

         After considering Defendants' motions, Plaintiffs responses, in opposition, and the record, the Court GRANTS IN PART and DENIES IN PART Defendants' Motions to Dismiss.

         FACTUAL AND PROCEDURAL HISTORY

         1. Plaintiff is an electrical installation company that maintains an office at 5921 Bistol-Emilie Road, Levittown, Pennsylvania 19057.

         2. Defendant C&M is a New York based construction company, which maintains an office at 36 Phila Street, Sarasota Springs, New York 12866.

         3. Defendant Mid-Atlantic Electrical Service is an electrical services company which maintains an office at 24556 Betts Pond Road, Millsboro, Delaware 19966.

         4. The alleged acts and omissions claimed by Plaintiff occurred primarily in Dover, Delaware.

         5. On May 4, 2017, Defendant C&M hired Plaintiff to perform electrical services at Panera Bread, located at 545 N. DuPont Hwy in Dover, Delaware. Defendant C&M and Plaintiff entered into a contract that provided Plaintiff would be paid $157, 500.00 by Defendant Conboy and Mannion for its services.[2]

         6. The contract contained several provisions of note. First, it contained an integration clause that stated:

...writing constitute[d] the entire agreement of the parties and supercedes all prior negotiations, discussions, representations, understandings [, ] or agreements with respect to the subject matter hereof and may not be specifically referring to this Agreement signed by all of the parties hereto."[3]

         Second, it also contained a choice of law provision stating that the Contract and any amendments:

[S]hall be governed by and construed in accordance with the law of the State of New York applicable to contracts made and to be performed entirely therein.[4]

         Finally, the Contract contained a provision requiring arbitration. The Contract specifically states:

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration in Saratoga Springs, New York, administered by the American Arbitration Association (hereinafter "AAA").[5]

         This specific arbitration clause further stated:

Notice of demand shall be filed with the AAA within one hundred twenty (120) days after a dispute first arises.[6]

         7. On May 8, 2017, Plaintiff hired Defendant Mid-Atlantic as a sub-contractor to perform electrical services at the Panera Bread.[7] Defendant C&M was allegedly aware that Plaintiff had hired Defendant Mid-Atlantic as a sub-contractor and expressed its acceptance of the arrangement at multiple times between May 2017 through August 2017.[8]

         8. The agreement regarding the procedure for payment between the parties appears to be that Defendant C&M would pay Plaintiff and then in turn, Plaintiff would pay Defendant Mid-Atlantic.[9] From May 2017 to July 2017, Defendant C&M made timely installment payments to Plaintiff and Plaintiff made timely payments to Defendant Mid-Atlantic.

         9. In August 2017 and for reasons unknown, Defendant C&M withheld payments to Plaintiff regarding the reminder of its outstanding balance. As a result, Plaintiff was not paid for expenses or payments made to Defendant Mid-Atlantic. Defendant Mid-Atlantic then asserted that Plaintiff was late in its payment.[10]

         10.After not receiving payment from Plaintiff, Defendant Mid-Atlantic sought payment directly from Defendant C&M. Defendant C&M agreed to pay Defendant Mid-Atlantic.

         11. On December 1, 2017, Plaintiff filed a mechanic's lien in this Court[11]against property located at 545 N. DuPont Hwy. in Dover.[12] On March 23, 2018, the mechanic's lien was discharged with consent of Plaintiff after Defendant C&M paid the bond to the Court. This Court currently still holds that bond.[13]

         12. Plaintiff filed its current action, based in contract and tort, on December 13, 2018.

         13. In response, two dismissal motions have been filed in this Court. First, Defendant C&M filed a Motion to Dismiss on March 27, 2019. Second, Defendant Mid-Atlantic followed with its own Motion to Dismiss on April 1, 2019.

         14. The Court heard this matter at oral argument on July 12, 2019.

         PARTIES' CONTENTIONS

         A. Defendants' Contentions Regarding Their Motions to Dismiss

         15. The Defendants share many of the same arguments in their motions, but differ in some areas due to the allegations against each individually by Plaintiff.

         i. Defendant C&M.

         16. The crux of Defendant C&M's argument supporting their motion is that this Court lacks jurisdiction over Plaintiffs cause of action.[14] It specifically argues that the arbitration clause contained in the contract trumps any subject matter jurisdiction that this Court may have had otherwise.[15] Defendant C&M also asserts that Plaintiffs claim was filed well beyond the 120 days the Contract allows to file a notice of demand for arbitration.[16]

         ii. Defendant Mid-Atlantic.

         17. Defendant Mid-Atlantic appears to nearly mirror Defendant C&M's arguments asserting the Court's lack of subject matter jurisdiction in this case and the untimeliness of Plaintiff s filing.[17] Notably absent is any inference that New York law applies to its contract.

         B. Plaintiffs Contentions Regarding Defendants' Motions to Dismiss Based on Breach of Contract Theory

         i. In regards to Defendant C&M.

         18. Plaintiffs reply, in opposition, to Defendant C&M's motion asserts that this Court does in fact have subject matter jurisdiction, notwithstanding the arbitration provision contained in the Contract. Plaintiff makes four primary arguments in its response.

         19. First, Plaintiff argues that Defendant C&M's participation in its mechanic's lien action effectively waived its right to enforce the arbitration clause.[18]Plaintiff specifically points to Defendant C&M's lack of argument regarding the arbitration clause during it's mechanic's lien litigation.[19]

         20. Second, Plaintiff contends the dispute arose on August 27, 2017 which led to the mechanic's lien being filed in this Court on December 1, 2017, 96 days after the dispute arose.[20] Plaintiff contends that by filing the mechanic's lien within the 120 day period, it is timely filed. Regardless, Plaintiff asserts that the applicable statue of limitations regarding filing is tolled because of the mechanic's lien action.[21]

         21. Third, Plaintiff argues that the arbitration provision of the Contract is unenforceable as a matter of law.[22] Plaintiff asserts that because the contract's 120 day limitation shortens the Delaware statute of limitations by nearly 90%, the limitation is insufficient and unenforceable under Delaware law.[23] Additionally, Plaintiff contends that the arbitration clause would have precluded Plaintiff from filing and enforcing a mechanic's lien in the only matter that Delaware law allows, adding support for why the provision is unenforceable.[24]

         ii. In regards to Defendant Mid-Atlantic.

         22. Plaintiffs arguments in response to Defendant Mid-Atlantic's motion appear similar to its arguments previously made in response to Defendant C&M's motion in regards to breach of contract.[25] Plaintiff does provide additional amplification of its arguments, however, due to ...


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