Opinion
C.A. No. 06A-09-002.
Date Submitted: April 2, 2007.
July 31, 2007.
James F. Waehler, Esquire, Tunnell Raysor, P.A., Georgetown, Delaware.
Joseph C. Raskauskas, Esquire, Coastal Highway at Middlesex Beach Bethany Beach, Delaware.
Dear Counsel:
Pending before the Court is an appeal from the Court of Common Pleas. This is my decision affirming the lower court's decision.
Statement of the Case
The lower court heard testimony in this case on June 14, 2006, and issued a written decision on August 17, 2006. The lower court ruled in favor of Plaintiff, A A Air Services, and ordered Defendant, Jane Richardson, to pay $3,218.75, plus interest. Ms. Richardson appealed that decision to this Court on September 14, 2006.
Statement of Facts
The basis of this lawsuit is a contract between Plaintiff/Appellee ("Appellee" or "A A Air Services") and Defendant/Appellant ("Appellant") whereby Appellee was to install a geothermal heating and cooling system in Appellant's residence. Appellant failed to tender the final payment due under the contract upon completion of the installation. Appellant rationalized her failure to do so on the ground that Appellee had failed to properly install the system and this failure caused Appellant to suffer damages. Appellee filed suit against Appellant for the remaining contract balance and Appellant filed a counterclaim seeking damages. The facts are as set forth below.
The parties entered into a written contract on or about December 10, 2001, whereby the Appellee agreed to install a geothermal heat pump system in Appellant's residence in Fenwick Island, Delaware, for a total price of $14,875.00. The subject residence contains three floors — a ground floor, a first floor, and a second floor. Appellee's employee, Carl Madden ("Mr. Madden"), consulted with Stanford Moore ("Mr. Moore"), who lives with Appellant, in providing an estimate for the work. In order to aid Mr. Madden in making this estimate, Mr. Moore provided blue prints of the residence to Mr. Madden.
Mr. Moore and Ms. Richardson were married for twelve years before they divorced and briefly separated. They have been residing together, on and off, in the house since 1982.
The contract provided that Appellee was to install a Water Furnace Geothermal Heat Pump System on the first and second floors. During the trial, it came to light that duct work had been installed in the ground floor of the residence. The parties disputed whether the duct work was originally planned for and installed by Appellee or whether the ground floor was excluded from the original plans and the duct work was installed after Appellee finished working at the residence. In any event, the contract provided for payment to be made in four installments of $3,718.75 each. Appellant tendered timely payment for the first three installments but did not make the final payment. The parties agree that originally Appellee planned to install four 3/4-inch wells with an approximate depth of 180 feet each to service the geothermal system. After inspection of the property revealed that an underlying utility line would prohibit the drilling of one of the wells, Appellee modified its plans to include the drilling of three 1-inch wells with an approximate depth of 240 feet each. The contract specified the model numbers for the pumps to be installed but the actual pumps installed were numbered differently. Tom Atkinson ("Mr. Atkinson"), a Manufacturing Representative for Water Furnace International, testified that the pumps actually installed in Appellant's residence were the same as the pumps proposed in the contract. Any name changes were due to upgrades in the models. Furthermore, the model numbers differed due to an apparent typo in the report, and the presence of additional letters in the model numbers merely indicated whether the equipment was top-loaded, right-handed or left-handed. Mr. Atkinson testified that there was no difference in either substance or capacity between the equipment specified in the contract and that which was actually installed in Appellant's residence.
The contract did not mention the ground floor of the house.
During the course of the installation, Appellee's employees testified that they dealt almost exclusively with Mr. Moore. Mr. Moore continually observed their work and when Mr. Moore was dissatisfied, they would alter their work to accommodate his requests. For example, Gregory Allen ("Greg Allen"), the owner of A A Air Services, testified that he installed a split system to accommodate Mr. Moore's request that the pump not be installed in a particular closet. During the months Appellee was installing the geothermal system, Mr. Moore was overseeing other ongoing construction at the residence; Mr. Moore was also overseeing this work. In sum, for all intents and purposes relating to the execution of the parties' contract, Mr. Moore acted as the owner of the residence.
In early July 2002, Appellee had completed most of the installation of the geothermal system. The remaining work consisted of installing registers and grills, which help to balance the system. At some point, the system was activated despite the fact that the contract provided, "[t]his unit may not be used for heating or cooling until job is completed." On or about July 11, 2002, Mr. Moore called Appellee and complained that the system was not properly cooling the residence. Chris Allen, co-owner of A A Air Services, reported to the residence in response to the service call. Chris Allen testified that the temperature in the home registered at 67 degrees. Although the thermostat was set at 54 degrees, Chris Allen determined that the system was operating properly because the capacity of geothermal systems are impacted by external temperatures and it was quite hot outside. Upon further inspection of the unit, Chris Allen determined that the air filters were clogged with construction residue and that the system had been tampered with.
Shortly after Mr. Allen inspected the system, also on July 11, 2002, Greg Allen and Mr. Atkinson went to Appellant's residence and met with Mr. Moore to further inspect the system. At this meeting, an altercation ensued where Mr. Moore became physically abusive toward Mr. Atkinson. After this dispute, Appellee refused to allow its employees on the site and sent Appellant a final bill for the work completed, deducting $500 for work that remained to be finished. This unfinished work related to the installation of registers and grills. Appellant refused to pay this bill. Appellant testified she did not believe the system was adequate because when the system ran, the temperature was inconsistent throughout the house.
Discussion Standard of Review
The standard and scope of the Court's review of an appeal from the Court of Common Pleas is to "correct errors of law and to review the factual findings of the court below to determine if they are sufficiently supported by the record and are the product of an orderly and logical deductive process." State Farm Mut. Auto. Ins. Co. v. Dann, 794 A.2d 42, 45 (Del.Super. 2002) (internal quotation marks and citation omitted). The Court will review any questions of law presented de novo. Id.
Questions Presented
1. Did the lower court err as a matter of law when it concluded Mr. Moore was acting as Appellant's agent when he engaged in a physical altercation with Mr. Atkinson?The lower court found that Mr. Moore was Appellant's agent for purposes of the breach of contract dispute and that he had apparent authority to act on Appellant's behalf with respect to the contract with Appellee. Appellant does not dispute that Mr. Moore acted as Appellant's agent and had the authority to bind her during the course of dealing with Appellee. However, Appellant argues that Mr. Moore's physical altercation with Mr. Atkinson was not within the scope of Mr. Moore's apparent authority. I find this argument unpersuasive.
Appellant correctly states that the law sets reasonable limits on the scope of an agent's authority. Questions of apparent authority are generally questions of fact and are, therefore, for the fact finder to determine. Billops v. Magness Constr. Corp., 391 A.2d 196, 198-99 (Del. 1978). The problem of determining whether or not a particular tortious act was one performed within the scope of one's authority is, likewise, ordinarily a decision for the fact finder. See Simms v. Christiana Sch. Dist., 2004 WL 344015, at *5 (Del.Super. Jan. 30, 2004) (citing with approval Restatement (Second) of Agency § 245).
Both parties cite to Draper v. Olivere Paving Construction Co., 181 A.2d 565 (Del. 1962).
That case involved an altercation between a construction company employee and a motorist. The question presented was whether the construction company was liable for the intentional tort of its employee. The Court summarized agency principles for purpose of deciding whether or not a particular tortious act was performed within the scope of the agent's authority as follows:
In the Restatement of Agency (2d), § 228, it is laid down that the conduct of a servant is within the scope of his employment if (1) it is of the kind he is employed to perform; (2) it occurs within the authorized time and space limits; (3) it is activated, in part at least, by a purpose to serve the master; and (4) if force is used, the use of force is not unexpectable by the master.
Many factors enter into the decision as to whether or not a particular tort was committed by a servant within the scope of his employment. . . . Those which seem pertinent to the case at bar are: (1) whether the act is one commonly done by such servants; (2) the time, place and purpose of the act; (3) whether or not the act is outside the enterprise of the master; (4) whether or not the master has reason to expect that such an act will be done; (5) the similarity in quality of the act done to the act authorized; and (6) the extent of departure from the normal method of accomplishing an authorized result.Draper, 181 A.2d at 442-43. Ultimately, the Court determined that the issue of whether the employee was acting outside the scope of his authority was a matter for the trier of fact to determine. The questions of (1) whether the employee was engaged in the performance of a part of his duties; (2) whether the use of force was unexpectable; and (3) whether the assault upon the motorist was "entirely the product of [the employee's] anger, which arose independently of his performance of the duties of his employment, or whether it occurred while [the employee] was in fact in the performance of his duties, and was motivated at least in part by the desire to serve his master's interests" were all "close and difficult questions" that were not for the judge to decide as a matter of law but were questions properly reserved for the trier of fact. Id. at 445.
In this case, I find that the factors to be considered when determining whether Mr. Moore acted within the scope of his apparent authority when he assaulted Mr. Atkinson were properly considered by the lower court. There was a rational basis for the lower court to have concluded that (1) Mr. Moore was interacting with Mr. Atkinson in the scope of his representation of Appellant; (2) the interaction took place during authorized time and space limits — that is, during normal business hours and on location, so to speak; (3) Mr. Moore's motivation was to serve Appellant as their interests as cohabitants surely coincided; and (4) given the extensive history between Appellant and Mr. Moore, Appellant could have reasonably expected Mr. Moore's agressive behavior.
In her Reply Brief, Appellant seeks to distinguish apparent agency principles from actual agency principles and argues that the framework set forth in Draper does not apply. This is an interesting but disingenuous argument as Appellant cites these very principles in her Opening Brief. Moreover, it is well established that the rules applicable to the interpretation of actual authority are applicable to the interpretation of apparent authority, with two exceptions not relevant here. Restatement (Second) of Agency § 49.
Absent a finding of abuse of discretion, this Court will not disturb the lower court's ruling that Mr. Moore was acting within the scope of his authority when he assaulted Mr. Atkinson.
2. Did the lower court err as a matter of law in determining that the physical altercation initiated by Mr. Moore was a breach of the implied covenant of good faith and fair dealing?
Appellant asserts that the lower court improperly relied upon the implied covenant of good faith and fair dealing to essentially transform a tort action into a breach of contract action. Appellant argues that the implied covenant of good faith and fair dealing cannot be used to imply a contractual duty that is only tangentially related to the subject matter of the written contract. Appellee counters that the purpose of the implied covenant of good faith and fair dealing is to address precisely the type of situation presented by the facts in this case. Specifically, the purpose of the covenant is to require the parties to a contract "to refrain from arbitrary or unreasonable conduct which has the effect of preventing the other party to the contract from receiving the fruits of the bargain." Dunlap v. State Farm Fire Cas. Co., 878 A.2d 434, 442 (Del. 2005).
The lower court recognized that Delaware precedent dictates that cases governed by the covenant of good faith and fair dealing be rare and that the covenant be applied only where it is necessary to honor the reasonable expectations of the parties. After noting this hesitation on the part of the Delaware courts to apply the covenant, the lower court concluded that it was proper to apply the covenant in this case, where no express contractual term could be directly applied to the physical altercation that occurred between Mr. Moore and Appellee's employee. The lower court concluded:
Had the parties foreseen that the [Appellee's] employees might be threatened with physical harm, they would have included a provision that required the [Appellant] to keep the residence in a reasonably safe condition so as to protect those employees from that type of danger. The Court finds that the [Appellant] failed to maintain the residence in a reasonably safe condition and acted unreasonably when her agent, Mr. Moore, became physically agressive.A A Air Servs., Inc. v. Richardson, 2006 WL 2382433, at *5 (Del. Com. Pl. Aug. 17, 2006).
After reviewing the lower court's reasoning and the applicable law, I conclude that the trial court's decision is well reasoned and should not be disturbed.
3. Was the lower court's decision incorrect as a matter of law because the record does not contain substantial evidence to support the conclusion that Appellee substantially performed its duties under the contract?
Finally, Appellant argues that the record below does not support the trial court's finding that Appellee substantially performed its duties under the parties' contract. In support of this assertion, Appellant cites to the discrepancy between the original number of wells Appellee indicated it would need to drill (four) and the final number of wells drilled (three). Appellant also contends the lower court's finding that the duct work running to the ground floor foyer area was added subsequent to Appellee's performance was unsupported by the record.
The lower court meticulously cited to the record in its decision. There were a number of knowledgeable witnesses who testified as to the location and depth of the wells that were ultimately drilled at Appellant's residence. It is within the purview of the lower court to weigh testimony and make credibility determinations. The trial court determined that the three wells drilled, those wells being thicker and deeper than the four wells originally proposed, were adequate to support the geothermal system Appellee installed. This Court will not disturb these factual findings made by the lower court, which heard and weighed the credibility of the conflicting evidence. The lower court also made a factual determination that the duct work in the foyer was added after Appellee finished working on the residence and that duct work in the foyer was not originally part of the parties' agreement. These conclusions are supported by the record. Appellant, herself, testified that "some additional duct work" was added after Appellee finished the installation of the geothermal system. Several witnesses testified that the agreement between the parties did not encompass any work on the ground floor, or in the foyer area located on the ground floor. Appellant is not entitled to have the lower court's decision reversed merely because conflicting evidence was presented below. As previously stated, it is the duty of the trier of fact to weigh the evidence and make credibility determinations. Unfortunately for Appellant, the lower court did not find her testimony persuasive. The lower court's conclusion that Appellee substantially complied with the contract is supported by substantial evidence and will not be set aside by this Court.
Conclusion
For the reasons set forth herein, the well-reasoned decision of the Court of Common Pleas dated August 16, 2006, is affirmed.IT IS SO ORDERED.