Opinion
C.A. No. 02C-04-032 RRC.
Submitted: June 10, 2004.
A decision on these motions was deferred pending the oral argument on July 28, 2004 on four summary judgment motions in the related case of Brown v. The Church Ins. Co. et. al., C.A. No. 02C-06-196, Del. Super., Cooch, J.
Stephen P. Casarino, Esquire, Casarino, Christman Shalk, Wilmington, Delaware, Attorney for Capital Management Company.
Stephen B. Potter, Esquire, Jennifer-Kate Aaronson, Esquire, Potter, Carmine, Leonard Aaronson, P.A., Wilmington, Delaware, Attorneys for Charles A. Brown, Intervenor.
Daniel A. Griffith, Esquire, Marshall, Dennehay, Warner, Coleman Coggin, Wilmington, Delaware, Attorney for Cathedral Community Services.
On Intervenor Brown's Motion for Summary Judgment.
GRANTED.
On Capital Management Company's Cross Motion for Summary Judgment.
DENIED.
Dear Counsel:
Currently before this Court are the motions for summary judgment of Intervenor Charles A. Brown ("Brown") and of Capital Management Company ("Capital"). Capital's motion is in effect a motion for summary judgment against Cathedral Community Services, Inc. ("Cathedral"); however, Brown was allowed to intervene pursuant to Superior Court Civil Rule 24(a)(2) to protect his interest. This Court now holds, based in part on the findings of the Delaware Supreme Court in the related case Capital Management Co. v. Brown, that the written contract between Capital and Cathedral expired in 1995. When the contract expired it extinguished all obligations and duties between the parties, including any contractual right of indemnification between the parties. The implied-in-fact contract, as held by the Delaware Supreme Court, was a new contract the terms of which were dictated by the conduct and actions of the parties and governed the duties of each party in respect to maintenance of the fire escape. The implied-in-fact contract did not include an indemnity provision. The result in this case is required by the "law of the case" doctrine. Accordingly, Brown's motion for summary judgment is GRANTED and Capital's cross motion for Summary judgment is DENIED.
Brown executed a settlement agreement with Cathedral containing certain indemnification provisions prior to the September 10, 2001 trial. Brown agreed to indemnify Cathedral against any claims for indemnity against Capital arising from the written contract between Cathedral and Capital. Cathedral raised as a defense in the instant case the release and settlement agreement with Brown. Brown moved to intervene because he believed that Cathedral "may not as a practical matter adequately protect" his interest. Capital Management Co. v. Cathedral Community Services, Inc. C.A. No. 02C-04-038, Del. Super., Cooch, J. (Brown's Motion to Intervene at ¶¶ 2, 6, 7).
Capital Mgmt. Co. v. Brown, 813 A.2d 1094, 1096 (Del. 2003).
FACTUAL AND PROCEDURAL HISTORY
The relevant facts of the litigation underlying this current lawsuit are set forth in the Supreme Court's decision affirming the findings made by the jury and trial judge in the case of Charles Brown v. Cathedral Community Services and Capital Management Company, C.A. No. 99C-10-210 RRC:
On June 1, 1994, Cathedral entered into a written contract with Capital, whereby Capital agreed to manage and maintain certain properties owned by Cathedral. These properties included 2001 N. Market Street. This contract expired one year later in 1995.
On August 23, 1999, the plaintiff, Charles Brown was standing underneath an exterior fire escape attached to the side of 2001 N. Market Street. Brown touched the bottom step of the fire escape ladder, and the ladder section fell striking Brown on the head. He suffered a compound, comminuted, depressed skull fracture. The ladder section fell because a supporting metal cable, which was severely corroded, broke, releasing the ladder and a counterweight.
On October 21, 1999, Brown filed a damage action against Cathedral and Capital. Capital answered the complaint, and asserted a cross-claim against Cathedral for contribution and indemnification. Brown settled his claim against Cathedral and signed a joint tortfeasor release Although Capital continued to maintain its cross-claim against Cathedral, Cathedral chose not to contest the crossclaim, and ceased participating in the litigation. The case went to trial on September 10, 2001.
. . .
On September 14, 2001, the jury returned a verdict in favor of Brown. The jury apportioned liability 60% against Capital and 40% against Cathedral, and awarded Brown damages in the amount of $2,250,000.
Brown settled with Cathedral for $525,000.
Capital Mgmt. Co. v. Brown, 813 A.2d 1094, 1095-1096 (Del. 2003).
In Capital's appeal to the Delaware Supreme Court, it argued, in relevant part, that the expired written contract between Capital and Cathedral continued in force beyond the expiration and that this contract was ambiguous as to the maintenance of the property. The Supreme Court, however, found that "[a]lthough the written contract expired in 1995, Capital continued to manage Cathedral's property . . .," and that the parties were operating under an implied-in-fact contract at the time of Brown's accident. The Supreme Court noted that the jury was asked only to determine the "what [was] the agreement between the parties based on their relationship and conduct regarding maintenance of the property." The Supreme Court, in affirming the jury's verdict, held that even after that contract had expired, "Capital had agreed to assume the duty to maintain the exterior of 2001 N. Market Street and . . . the Wilmington City Code required [Capital] to maintain the fire escape [for Cathedral]."
Capital Management Co., 813 A.2d at 1096.
Capital Management Co, 813 A.2d at 1096, 1098.
Capital Management Co, 813 A.2d at 1097.
Capital Management Co, 813 A.2d at 1098.
In April 2002, Capital filed a complaint for a declaratory judgment against Church and Brown requesting this Court to declare that Capital was an insured under a policy of insurance issued by Church. Capital also filed a complaint for indemnity against Cathedral in this case. Brown, after being permitted to intervene in this case, filed a motion for summary judgment, which challenged Capital's contractual claim for indemnity. Capital filed a cross motion for summary judgment. Oral argument was held on both motions on June 10, 2004.
The issue of whether Capital was a named insured under Cathedral's insurance in this new case, Capital Management Co. v. Church Ins. Co., C.A. No. 02C-04-032, Del. Super., Cooch, J. has now apparently been resolved by agreement of the parties in that the parties agree that Capital was a named insured.
Brown had not been named as a defendant in the companion case Capital Management Co. v. Cathedral Ins. Co., C.A. No. 02C-04-038, Del. Super., Cooch, J. On January 23, 2004, C.A. No. 02-04-038 was consolidated into C.A. No. 02C-04-032.
STANDARD OF REVIEW
Summary judgment is granted only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. When the moving party makes this initial showing, the burden then shifts to the non-moving party to demonstrate that there are material issues of fact. The Court must view the facts in a light most favorable to the non-moving party. In resisting a motion for summary judgment, the non-movant's evidence of material facts in dispute "must be sufficient to withstand a motion for directed verdict [ i.e., a motion for judgment as a matter of law] and support the verdict of a reasonable jury." If the summary judgment movant does not bear the burden of proof at trial, "the movant's burden to show presumptive entitlement to summary judgment is satisfied if the movant points to the absence of any factual support for an essential element of plaintiff's claim." All reasonable inferences must be drawn in favor of the non-moving party.
Super. Ct. Civ. R. 56(c); Burkhart v. Davies, 602 A.2d 56 (Del. 1991).
Super. Ct. Civ. R. 56(e); Moore v. Sizemore, 405 A.2d 679 (Del. 1979).
Merrill v. Crothall-American, Inc., 606 A.2d 96, 99-100 (Del. 1992).
James W. Moore et. al., Moore's Federal Practice § 56.03[3], at 56-35 (3d ed. 2003) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-252 (1986)); see also Cerberus Int'l, Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1148-1149 (Del. 2002) (en banc) (adopting Liberty Lobby's "main holding" that the substantive standard of proof required at trial should also be the substantive standard of proof at the summary judgment stage).
Moore's, supra, note 41, § 56.03[5], at 56-39 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-324 (1986)); see also Burkhart, 602 A.2d at 59 (stating that the ratio decidendi of Celotex is persuasive and directly applicable to circumstances where the non-movant has failed to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof).
Liberty Mutual Ins. Co. v. Devlin, 1998 Del. Super. LEXIS 109 at 9 (Del.Super. Ct) (quoting Sweetman v. Strescon Indus., 389 A.2d 1319, 1324 (Del.Super.Ct. 1978).
However, in a case involving cross motions for summary judgment, as here, the parties implicitly concede the absence of material factual disputes and acknowledge the sufficiency of the record to support their respective motions. Thus, in the instant case, the parties have implicitly conceded the absence of any material factual disputes, in that neither party asserts that there are any material facts in dispute.
Merrill v. Crothall-American, Inc., Del. Supr., 606 A.2d 96, 100 (1992) (stating that parties implicitly concede the non-existence of factual disputes upon their filing of cross motions for summary judgment, citing Fiduciary Trust Co. v. Fiduciary Trust Co., Del. Supr., 445 A.2d 927 (1982)).
SUMMARY OF THE HOLDING
Although the parties have raised other issues, the Court concludes that the only issue necessary for resolution is whether the "law of the case" as established by the Delaware Supreme Court in Capital Management Co. v. Brown is determinative of the instant case. In Capital Management Co., the Supreme Court held that the written contract between Capital and Cathedral had expired and that the parties continued to operate under an implied-in-fact contract. Because this Court finds that 1) the Supreme Court's decision determined that the implied-in-fact contract contained terms only relating to the maintenance of the property 2) that that decision is not "clearly wrong," 3) that it did not produce an injustice, or 4) that the circumstances have not changed, Capital is precluded from relitigating the issue and summary judgment in favor of Brown is appropriate. This Court now holds that under the "case of the law" doctrine Capital is barred from rearguing the issue of what terms constitute the implied-in-fact contract found by the jury in the underlying case and affirmed by the Supreme Court.
CONTENTIONS OF THE PARTIES
Brown's primary argument is, in essence, that the "law of the case" as established by the Supreme Court now precludes Capital from relitigating the issue of whether the implied-in-fact contract contained an indemnity provision. Brown's position is that the contract had expired, thereby extinguishing any contractual right of indemnification of Capital against Cathedral. Brown asserts that "[t]he Supreme Court affirmed the verdict on the finding that the contract between the parties was `implied-in-fact after the express written contract had expired'." Brown argues that "[t]he jury made a factual determination that Capital, through its conduct, had a duty to maintain the fire escape." Brown asserts that Capital's stance that the parties continued to operate under the written contract "misrepresents the [Supreme] Court's very clear decision and the law of the case. [Citation omitted]. The Supreme Court's decision was specifically limited to finding an implied-in-fact contract with respect to maintenance of the fire escape only." Brown further argues that "Capital never presented evidence that any other terms of the contract could be implied-in-fact based on the conduct of the parties . . . [and] the jury made no determination of the duty of Cathedral to indemnify Capital under the terms of the expired contract."
Brown Reply at 4.
Brown Reply at 4.
Brown Reply at 5.
Brown Reply at 5.
Capital also asserts the "law of the case" doctrine in support of its motion for summary judgment. Capital argues that "[a]lthough the written contract between Capital and Cathedral expired, the parties continued to operate under the terms of the contract." Capital contends that the Supreme Court "concluded that the contract between Cathedral and Capital was indeed an implied in fact contract proved through the conduct rather than words of the parties." Capital argues that "[t]he contract not only dealt with the maintenance of the property but also had provisions concerning indemnification."
Capital's Response at 3.
Capital's Response at 3.
Capital's Response at 3.
Capital's Response at 3.
DISCUSSION
The Delaware Supreme Court's holding that the written contract between Capital and Cathedral had expired as of August 23, 1999, the date of the accident, and that the parties were then operating under an implied-in-fact contract, relating to the maintenance of the fire escape, precludes Capital from relitigating the issue of what terms where included in the implied-in-fact contract before this Court. In the instant case, Capital argues that the terms of the written contract continued in effect after its expiration, thereby providing a contractual basis for Capital to claim indemnification from Cathedral. The "law of the case" doctrine precludes Capital from making any contractual indemnification claim based on the terms of the expired written contract.Generally, the "law of the case" doctrine, "like the stare decisis doctrine, is founded on the principle of stability and respect for court processes and precedent." The "law of the case" doctrine is meant to bring "some closure to matters already decided in a given case by the highest court of a particular jurisdiction." The "law of the case" doctrine applies to any case in which there has been a related prior proceeding and is an extension of the concept that "when an appellate court remands a case for further proceedings, `the trial court must proceed in accordance with the mandate and law of the case as established on appeal'." A trial court on remand is not constrained by the mandate "as to matters not addressed on appeal [however,] the trial court is bound to strictly comply with the appellate court's determination of any issues expressly or impliedly disposed of in its decision."
Gannett Co., et al., v. Kanga, 750 A.2d 1174, 1181 (Del. 2000).
Gannett Co., 750 A.2d at 1181.
Insurance Corp. of America v. Barker, 628 A.2d 38, 40 (Del. 1993).
Insurance Corp. of America, 628 A.2d at 40.
The Supreme Court held in Insurance Corp. of America v. Barker that "[the] `law of the case' doctrine encompasses these principles arising from the `mandate rule.' [Citation omitted]. The doctrine stands for the proposition that `findings of fact and conclusions of law by an appellate court are generally binding in all subsequent proceedings in the same case in the trial court or in a later appeal'." The "law of the case" doctrine is not unconditional, nor is it "inflexible in that, unlike res judicata, it is not an absolute bar to reconsideration of a prior decision that is clearly wrong, produces an injustice or should be revisited because of changed circumstances."
Insurance Corp. of America, 628 A.2d at 40. The instant case is not 1) on remand, 2) a later case nor, strictly speaking, 3) a subsequent proceeding from the underlying case. However, the issues presented and the parties in the instant case are the same as in the underlying case.
Gannett Co., 750 A.2d at 1181.
The Delaware Supreme Court has already decided on direct appeal that the written contract between Capital and Cathedral had expired and the terms of the implied-in-fact contract between the parties contained only terms as to the maintenance of the property. The Supreme Court found that "there was no written contract in effect between [Capital and Cathedral]." The Supreme Court held that "the issue submitted to the jury was this: What is the agreement between the parties based on their relationship and their conduct regarding maintenance of the property?" The Supreme Court found that the jury "was asked to determine what duties Capital had based on its relationship with Cathedral. [Citation omitted]. [The jury was] not asked to determine the meaning of the expired contract because the actual terms of the agreement and relationship between the parties were in dispute."
Capital Management Co. v. Brown, 813 A.2d 1094, 1097 (Del. 2002).
Capital Management Co., 813 A.2d at 1097.
Capital Management Co., 813 A.2d at 1097.
Capital, in fact, sought reargument in the Supreme Court that the terms of the expired written contract were controlling in the implied-in-fact contract. Capital moved for reargument of the Supreme Court's holding that the written contract had expired and the terms in the written contract were no longer in effect, specifically as to Capital's duty to maintain the building. Capital's contention in its motion for reargument was that "the contract with Cathedral existed at the time of the accident and it was clear and unambiguous." Capital asserted that "[a]lthough the original written contract between Capital and Cathedral had expired, the contract terms continued in effect without change." Cathedral asserted that "[the Supreme Court] incorrectly assume[d] that there was a dispute between Capital and Cathedral over the actual terms of their agreement and relationship [however,] [t]here [was] nothing in the record that indicates any such dispute between Capital and Cathedral, much less that the parties thought the actual terms of their agreement were unclear or ambiguous." The Supreme Court, however, rejected Capital's motion as "appearing [to be] without merit."
Capital Management Co. v. Brown, 192, 2002, Appellant Capital Management Company's Motion for Reargument at ¶ 1.
Capital Management Co. v. Brown, No. 192, 2002, Appellant Capital Management Company's Motion for Reargument at ¶ 1.
Capital Management Co. v. Brown, No. 192, 2002, Appellant Capital Management Company's Motion for Reargument at ¶ 3.
Capital Management Co. v. Brown, No. 192, 2002 Steele, J. (ORDER) (January 22, 2003).
This Court finds that, given the Supreme Court's decision on appeal in Brown v. Cathedral, Brown's motion for summary judgment should be granted and Capital's motion should be denied. There is no evidence that circumstances have changed since the Supreme Court's decision such that this Court should revisit the issue. This Court does not find that an injustice has been produced by the Supreme Court's decision in Brown. The Supreme Court's holdings, in regard to the terms of the implied-in-fact contract, are consistent with the jury's findings and do not appear to be "clearly wrong." Absent a showing that the Supreme Court's decision was "clearly wrong," had produced an injustice or that circumstances had changed such as to warrant revisiting the issue, this Court is compelled to follow the "law of the case" and grant Brown's motion and deny Capital's cross motion.
CONCLUSION
For all of the above reasons, Intervenor Brown's motion for summary judgment is GRANTED and Capital Management Company's cross motion for summary judgement is DENIED.