Opinion
C.A. No. 07L-01-045.
Date Submitted: January 9, 2008.
March 5, 2008.
K. William Scott, Esquire, Scott Shuman, LLC, West Fenwick, Delaware.
David C. Hutt, Esquire, Wilson, Halbrook Bayard, Georgetown, Delaware.
Richard E. Berl, Jr., Esquire, Matthew S. Lindauer, Esquire, Smith O'Donnell Feinberg Berl, LLC, Georgetown, Delaware.
Dear Counsel:
Pending before the Court are Defendants' Motion to Dismiss and Plaintiff's Motion to Amend the Complaint. For the reasons set forth herein, Plaintiff's Motion to Amend the Complaint is granted and Defendants' Motion to Dismiss is denied.
Factual Background
Because an Answer has not yet been filed in this case, the facts are taken from the Complaint. The Complaint, filed on behalf of Frick Electric, Heating Air Conditioning, Inc. ("Frick"), alleges that Frick contracted to provide materials and labor required to complete electrical and heating, ventilating and air conditioning ("HVAC") work for structures owned by Selbyville Bay Development, LLC ("SBD"). These structures collectively are known as "Mallard Cove I Townhouses" or "the Project". Frick alleges it performed its obligations under the two separate contracts between the parties and that SBD failed to fulfill its obligations under the contracts. As a result, Frick seeks the imposition of a mechanic's lien in the amount of $111,569.00 on the Project. The Complaint establishes the date Frick began furnishing labor or materials to the Project as June 15, 2004, and the date Frick last furnished labor or materials to the Project as October 18, 2006. The parties agree that, pursuant to 25 Del. C. § 2711, the last date on which the Complaint in this matter could have been filed was 180 days after the last date of work completed, or April 16, 2007.
Many of Defendants' arguments raise defenses based on allegations not contained in Plaintiff's Complaint and, therefore, these defenses are factual issues as opposed to legal issues.
Frick also named as Defendants in this action David F. Webb and Martha R. Webb ("the Webbs"), as well as Andrew B. Skean and Jacqueline L. Skean ("the Skeans"). The Webbs are the record title owners of Unit 6, Mallard Cove I, by deed of SBD dated September 28, 2006, and of record in Deed Book 3369, Page 17. The Skeans are the record title owners of Unit 13, Mallard Cove I, by deed of Selbyville dated September 28, 2006, and of record in Deed Book 3367, Page 159. The Complaint seeks an in rem judgment against Defendants SBD, Webb, and Skean, together with an in personam judgment against SBD. Pursuant to the contracts, Frick alleges it is due $73,644.00 for electrical services and $37,923.00 for HVAC services, together with pre and post-judgment interest and the costs of this action.
SBD, the Webbs and the Skeans shall collectively be referred to as "Defendants" throughout this opinion.
Procedural Background
Frick filed its Complaint on January 31, 2007. Defendants filed a Motion to Dismiss the Complaint on March 15, 2007. In response thereto, Frick filed both a Motion to Amend its Complaint and a Response to Defendants' Motion to Dismiss on March 29, 2007. The Court heard argument from counsel on the motions on April 20, 2007, and requested additional briefing from the parties. The parties finished supplemental briefing in May of 2007. Shortly thereafter, the proceedings were stayed pending the outcome of a bankruptcy claims court hearing scheduled in September of 2007. After some back and forth about procedural matters not relevant to the issues now before the Court, the case was sent to Chambers for decision on the outstanding motions on January 9, 2008.Discussion
Defendants object to several deficiencies in the Complaint. Frick attempts to remedy these alleged deficiencies by requesting permission to file an Amended Complaint. Defendants object to Frick's attempt to amend its Complaint on the basis that any request to amend was improperly filed.
I conclude that Frick properly moved to amend its Complaint and grant its request to do so. I also find the Amended Complaint addresses the majority of the objections raised to the original Complaint. Defendants' remaining complaints lack merit. Accordingly, I deny Defendants' Motion to Dismiss the Complaint. My reasoning follows.
The Motion to Amend the Complaint
Defendants argue that Frick's Motion to Amend the Complaint was not properly presented to the Court. Defendants assert that Frick did not move to amend the Complaint but, rather, requested amendment in its prayer for relief in its Response to Defendants' Motion to Dismiss. Defendants contend this filing violated Superior Court Civil Rule 7, which requires applications to the Court to be made by motion. Defendants further argue that, if the motion was, indeed, properly before the Court, the Court, because it did not rule on the Motion to Amend prior to April 16, 2007 (the date up to which the parties agree Frick had a right to amend the complaint pursuant to 25 Del. C. § 2711), may not now grant the Motion to Amend.
Defendants' arguments are without merit. In the first instance, although Frick did, in fact, ask the Court for permission to amend the Complaint in the prayer for relief section of Plaintiff's Response to Defendants' Motion to Dismiss filed on March 29, 2007, Frick also filed a Motion to Amend the Complaint on March 29, 2007. Whether Frick was required to request permission of the Court or was simply entitled to amend its Complaint up to April 16, 2007, is not material. Pursuant to Superior Court Civil Rule 15, leave to amend a pleading shall be "freely given when justice so requires."
As a practical matter, the Court can understand how the language of Rule 15 creates some ambiguity as to the proper manner in which to seek an amendment. The Court will not punish a filing party for requesting permission of the Court to do that which it is entitled to do, particularly when the alternative — in this case, the dismissal of the original Complaint and the refiling of the action — would cost both the parties and the Court unnecessary time and expense. "Judicial discretion is the exercise of judgment directed by conscience and reason, and when a court has not exceeded the bounds of reason in view of the circumstances and has not so ignored recognized rules of law or practice so as to produce injustice, its legal discretion has not been abused." Coleman v. PricewaterhouseCoopers, LLC, 902 A.2d 1102, 1106 (Del. 2006).
Defendants attempt to draw a distinction between a statute of limitations and a statute of repose, arguing that the filing deadline contained in the mechanic's lien statute is a statute of repose and, therefore, the Court's hands are tied and it may not now grant Frick's Motion to Amend. This argument, although interesting, lacks merit. To briefly summarize again the relevant facts concerning this Motion: the parties agree Frick had the right to amend the Complaint with respect to both trivial and non-trivial matters prior to April 16, 2007. See Melvin L. Joseph Constr. Co. v. Herring Creek Ltd. P'ship, 1987 WL 8674, at *2 (Del.Super. Feb. 10, 1987) (noting that any non-trivial amendment must be filed within the time frame designated by statute as the statute of limitations for the original claim). Instead of simply filing an Amended Complaint, Frick filed a Request to Amend the Complaint. Defendants argue this procedural "misstep" now leaves Frick without recourse.
There is, with regard to amendments, a preference for permitting a case to proceed to an adjudication on the merits. See Grand Ventures, Inc. v. Whaley, 632 A.2d 63 (Del. 1993). Much ado has been made about the fact that this case is a mechanic's lien action and, therefore, Frick's Complaint must strictly comply with the requirements of the mechanic's lien statute. Although it is, indeed, a fact that a complaint seeking the imposition of a mechanic's lien is subject to a high level of scrutiny, to so argue puts the cart before the horse when considering Frick's Motion to Amend. The simple fact is that Frick put the contents of its Amended Complaint before the Court prior to the expiration of the statute of limitations for filing a mechanic's lien action against Defendants. See 25 Del. C. § 2711. The Motion to Amend, while per haps unnecessary, was thus timely filed. The Court will not punish Frick because the Court has not ruled on the motion until now. The Court hereby grants Frick's Motion to Amend the Complaint.
Motion to Dismiss
The Court now will consider Defendants' Motion to Dismiss in light of the Amended Complaint. It is well-settled under Delaware law that a complaint will not be dismissed for failure to state a claim unless it appears reasonably certain "that a plaintiff would not be entitled to the relief sought under any set of facts which could be proven to support the action." Ramunno v. Cawley, 705 A.2d 1029, 1034 (Del. 1998); Rabkin v. Philip A. Hunt Chem. Corp., 498 A.2d 1099, 1104 (Del. 1985). In considering the sufficiency of the complaint, all well-pleaded allegations are accepted as true, and all reasonable inferences are construed in favor of the plaintiff. Havens v. Attar, 1997 WL 55957, at *5 (Del.Ch. Jan. 30, 1997). "A complaint[,] attacked by a motion to dismiss for failure to state a claim[,] will not be dismissed unless it is clearly without merit, which may be either a matter of law or of fact." Diamond State Tel. Co. v. University of Delaware, 269 A.2d 52, 58 (Del. 1978). In sum, the test for sufficiency is a broad one. It is measured by whether a plaintiff may recover under any reasonably conceivable set of circumstances susceptible of proof under the complaint. Spence v. Funk, 396 A.2d 967, 968 (Del. 1978); Klein v. Sunbeam Corp., 94 A.2d 385, 391 (Del. 1952). If the plaintiff may recover, the motion must be denied.As has been repeatedly noted by courts reviewing issues arising in mechanic's lien cases, because a mechanic's lien is a statutory remedy in derogation of the common law, its provisions must be strictly construed. Ceritano Brickwork, Inc. v. Kirkwood Indus., Inc., 276 A.2d 267 (Del. 1971).
Defendants raise the following objections to the Complaint:
1. The named plaintiff does not legally exist.
2. The named plaintiff is not a party to one of the contracts sought to be enforced.
3. Plaintiff cannot recover a judgment or secure a lien against the Webbs, the Skeans, or their respective properties because it never had a contractual relationship with them or any agent on their behalf and because the Webbs and the Skeans bought their units without notice of any claim asserted by Plaintiff.
4. Plaintiff has failed to apportion its claim over multiple structures, as required by 25 Del. C. § 2713.
5. Plaintiff cannot recover a judgment or secure a lien where the contracts and documents attached to its own complaint establish that all amounts due under the contracts and change orders have been paid in full and no other change orders or change directives have been alleged or attached.
6. Plaintiff has failed to join necessary parties in that one additional unit was sold and the owners were not joined as Defendants.
Frick attempts to remedy several of these deficiencies with its Motion to Amend the Complaint filed on March 29, 2007. I find that the Amended Complaint addresses several of the legal challenges raised by Defendants and Defendants' other allegations lack merit. Therefore, the Court denies Defendants' Motion to Dismiss.
Defendants' first two objections concern the proper identification of the plaintiff's corporate status. The contracts upon which this action is based refer to Frick variously as "Frick Electric Heating Air Conditioning" and "Frick Electric Company". These contracts are attached as exhibits to the Complaint. Frick alleges both contracts were drafted by SBD. The Complaint identifies the Plaintiff as "Frick Electric, Heating Air Conditioning, Inc." and alleges that Frick Electric, Heating Air Conditioning, Inc. is a Maryland corporation. In the Amended Complaint, Frick allegedly corrects the Plaintiff's name to read "Frick Electric Company, Inc." This amendment addresses one argument and supplants it with another. That is, one of the contracts that forms the basis for this action identifies as the contracting party an entity ("Frick Electric Heating Air Conditioning") that is not joined to this action. As Judge Slights recently observed, even if the plaintiff's identification is erroneous, that fact does not warrant dismissal of the complaint:
[Plaintiff's] complaint will not be dismissed at this stage of the litigation for naming a plaintiff who eventually proves to be the incorrect party. The [mechanic's lien] statute simply requires that the complaint set forth the name of the plaintiff or claimant. [Plaintiff's] complaint does just that. Whether or not he is the proper plaintiff or claimant is a matter to be determined on another day on a more complete record.Capossere v. Levine, 2008 WL 484442, at *2 (Del.Super. Feb. 20, 2008) (emphasis in original).
Defendants also argue Frick cannot recover a judgment or secure a lien against the Webbs, the Skeans, or their respective properties because Frick lacks privity of contract with the Webbs and the Skeans. Presumably, this argument also would be raised as to the inclusion of the McAllisters, who were added as Defendants to this action by way of the Amended Complaint. In fact, Delaware law requires that present landowners be joined to a mechanic's lien action. First Florida Bldg. Corp. v. Robino-Ladd Co., 424 A.2d 32 (Del.Super. 1980).
With regard to Defendants' argument that they were not on notice as to the potential lien at the time of purchase, if this is indeed true, Defendants Webb and Defendants Skean may have a cause of action against SBD.
Next, Defendants argue the Complaint is fatally flawed because the amount of the lien sought is not apportioned over the multiple structures, as required by 25 Del. C. § 2713. The Amended Complaint addresses this deficiency by asserting the claim may be equally divided among the structures. The Amended Complaint specifies a dollar amount attributable to each unit.
There is some allegation in the pleadings that this division is improper; that is, that some structures received more services from Frick than others. Whether or not the apportionment alleged is correct, however, is irrelevant to the Court's review of the pending Motion to Dismiss.
Defendants also assert that all monies due under the contracts have been paid and, therefore, Frick has failed to state a claim upon which relief may be granted. In support of this contention, Defendants point to t he ten percent retainage provision contained in the contracts. In response, Frick argues retainages become accounts receivable once the contracts have been performed. The Court finds there is a genuine dispute of material facts as to what amount, if any, is due to Frick under the contracts. As a result, the issue survives Defendants' Motion to Dismiss.
Finally, Defendants argue that Frick has improperly failed to join a necessary party, a unit owner at the time the action was filed. As previously noted, the Amended Complaint joins this party (the McAllisters) and renders this argument moot.
In summary, the majority of Defendants' arguments are addressed by Frick's Complaint, as Amended by the Motion to Amend herein granted. The arguments not addressed by that Amended Complaint are either without merit or require further factual development. Accordingly, Defendants' Motion to Dismiss is denied.
Conclusion
For the above-stated reasons, Frick's Motion to Amend the Complaint is granted and Defendants' Motion to Dismiss is denied.
IT IS SO ORDERED.