Wu v. Delaware Technical Community College ( 2022 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
CHENMOU WU, )
)
Plaintiff, )
)
v. ) C.A. No. N21C-07-045 EMD
)
DELAWARE TECHNICAL )
COMMUNITY COLLEGE, )
)
Defendant. )
MEMORANDUM OPINION GRANTING DEFENDANT’S MOTION TO DISMISS
PLAINTIFF’S AMENDED COMPLAINT
I. INTRODUCTION
This is a civil action involving fraud and negligence. Initially, Plaintiff Chenmou Wu
alleged that Defendant Delaware Technical Community College (“DTCC”) fraudulently induced
Mr. Wu to send $9,650 to a third party for an employment opportunity.1 Mr. Wu contends that
the emails came from a source purportedly associated with DTCC. On October 4, 2021, DTCC
filed a motion to dismiss Mr. Wu’s Complaint.2 On January 13, 2022, the Court granted
DTCC’s first motion to dismiss and gave Mr. Wu leave to amend his complaint.3
Mr. Wu filed an amended complaint on February 10, 2022 (the “Amended Complaint”).4
In the Amended Complaint, Mr. Wu now contends that DTCC negligently and fraudulent
induced him to pay $9,650 to a third party for an employment opportunity. Mr. Wu contends
that he has been damaged in the amount of $199,650.00 due to “massive mental, psychological
1
D.I. No. 1. Complaint (hereinafter, “Compl.”) at 2.
2
D.I. No. 9. Defendant’s Motion to Dismiss or in the Alternative Motion for a More Definite Statement (hereinafter,
“DTCC’s First Mot.”).
3
D.I. No. 16. Order (i) Granting Defendant’s Motion to Dismiss or in the Alternative Motion for a More Definite
Statement and (ii) Providing Leave to Amend (hereinafter, “Order”).
4
D.I. No. 17. Amended Complaint and Plaintiff’s Rebuttal Evidence to Defendant (hereinafter, “Am. Compl.”).
and financial harm.”5 On February 24, 2022, DTCC filed Defendant’s Motion to Dismiss
Plaintiff’s Amended Complaint (the “Motion”).6 Mr. Wu opposed the Motion and filed his
Plaintiff’s Motion of Hearing at the Court and Response Defendant’s Unreasonable Motions (the
“Response”) on March 15, 2022.7
On July 21, 2022, the Court held a hearing on the Motion and the Response.8 The Court
then took the Motion under advisement. The Court did not ask the parties to submit any
additional papers or pleadings. On August 2, 2022, Mr. Wu chose to file his Plaintiff’s
Additional Evidence, Statements and Conclusion to Against Defendant About the Hearing (the
“Supplement”).9
The Court has considered the Motion, the Response, the Complaint, the Amended
Complaint, the arguments made in support of the Motion and the Response, and the Supplement.
For the reasons set forth below, the Court shall GRANT the Motion.
II. RELEVANT FACTS10
Mr. Wu has been a registered student at DTCC since the spring of 2019.11
On December 17, 2020, Mr. Wu received an email from dfears1@dtcc.edu (the “Fears
Email”).12 The Fears Email reads as follows:
From: Dyamond Fears 27 A.3d 531, 535 (Del. 2011).
33
Price v. E.I. DuPont de Nemours & Co., 26 A.3d 162, 166 (Del. 2011), overruled on other grounds by Ramsey v.
Ga. S. Univ. Advanced Dev. Ctr., 189 A.3d 1255, 1277 (Del. 2018).
34
Cent. Mortg., 27 A.3d at 536 (citing Savor, Inc. v. FMR Corp., 812 A.2d 894, 895 (Del. 2002)).
35
Unbound Partners Ltd. P’ship v. Invoy Holdings Inc., 251 A.3d 1016, 1023 (Del. Super. 2021) (internal quotation
marks omitted); see Cent. Mortg., 27 A.3d at 537 n.13 (“Our governing ‘conceivability’ standard is more akin to
‘possibility . . . .’”).
36
Windsor I, LLC v. CWCapital Asset Mgmt LLC, 238 A.3d 863, 872-75 (Del. 2020); In re Santa Fe Pac. Corp.
S’holder Litig., 669 A.2d 59, 68 (Del. 1995).
37
In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d at 69.
38
Windsor I, LLC, 238 A.3d at 873 (internal quotation marks omitted).
39
Malpiede v. Townson, 780 A.2d 1075, 1083 (Del. 2001).
40
Del. Super. Ct. Civ. R. 9(b).
41
Id.42
TrueBlue, Inc. v. Leeds Equity Partners IV, LP, 2015 WL 5968726, at *6 (Del. Super. Sept. 25, 2015) (quoting
Universal Capital Mgmt., v. Micco World, Inc., 2012 WL 1413598, at *2 (Del. Super. Feb. 1, 2012)).
6
V. DISCUSSION
A. PLAINTIFF DOES NOT IDENTIFY WHAT FRAUD DTCC HAS COMMITTED
To state a claim of fraud in Delaware a Plaintiff must allege:
1) a false representation, usually one of fact…; 2) the defendant’s knowledge or
belief that the representation was false, or was made with reckless indifference to
the truth; 3) an intent to induce the plaintiff to act or to refrain from acting; 4) the
plaintiff’s action or inaction taken in justifiable reliance upon the representation;
and 5) damage to the plaintiff as a result of such reliance.43
To establish a claim for fraud, “a plaintiff must have acted in justifiable reliance on the
representation.”44
Mr. Wu admits that he is unsure who committed the fraud but that the perpetrator used an
email associated with DTCC.45 The email address, dfears1@dtcc.edu, was used to send fake job
posting information to Mr. Wu.46 The Amended Complaint’s Exhibit shows that the fraudulent
activity was conducted by someone using the kennethjones040214@gmail.com email address.47
The email of Kenneth Jones is not one associated with DTCC and Mr. Wu does not contend that
Mr. Jones is associated with DTCC.
The Amended Complaint attempts to assert a fraud claim against DTCC by arguing that
the email phishing incident, i.e., the Fears Email, was a “gross dereliction of duty” on the part of
DTCC.48 While Mr. Wu may allege a claim for fraud against dfears1@dtcc.edu and
kennethjones040214@gmail.com, the Court holds that Mr. Wu fails to assert an actionable fraud
claim against DTCC.
43
Hauspie v. Stonington Partners, Inc., 945 A.2d 584, 586 (Del. 2008).
44
ITW Global Investments Inc. v. American Industrial Partners Cap. Fund IV, L.P., 2015 WL 3970908, at *8 (Del.
Super. June. 24, 2015).
45
Am. Compl. ¶ 4.
46
Id.47
DTCC’s Mot. ¶ 13.
48
Response ¶ 4.
7
B. MR. WU FAILS TO IDENTIFY A PERSON OR PERSONS AT DTCC THAT MADE A FALSE
REPRESENTATION OF FACT
Mr. Wu identifies two persons at DTCC in the Amended Complaint: Mr. Winstead and
Mr. Shirey. The Court, drawing all reasonable factual inferences in favor of Mr. Wu, finds that
these communications do not constitute false representations of fact that were intended induce
Mr. Wu to act.
Mr. Wu states that Mr. Winstead was the first person to notify Mr. Wu of the fraudulent
scheme involving dfears1@dtcc.com.49 Mr. Wu argues Mr. Winstead neglected his duty.50
However, once Mr. Winstead was made aware of the fraud he alerted Mr. Wu that he may have
been a victim of an internet phishing scheme.51 It appears that Mr. Wu believes Mr. Winstead
should have been aware of the fraud earlier and that is what makes DTCC liable for fraud. To
support this, Mr. Wu argues there are severe loopholes in DTCC’s management.52 However, Mr.
Wu makes only conclusory statements and fails to identify what are the “loopholes” in DTCC’s
management. The Court assumes that Mr. Wu uses the term “loopholes” to mean that the DTCC
system should have anticipated potential frauds by third parties and taken prevention steps.
As pled and argued, Mr. Winstead is, at most, a messenger of facts and not someone who
made any material misrepresentations to Mr. Wu. Moreover, Mr. Wu cannot demonstrate that
anything Mr. Winstead communicated to Mr. Wu (i) was false or (ii) induced Mr. Wu to provide
money to kennethjones040214@gmail.com. Whether DTCC should have set up a system that
anticipated third party fraud goes to a negligence claim, if any. Fraud is an intentional tort and
not one of negligence.
49
Am. Compl. ¶ 1.
50
Id.51
DTCC’s Mot. ¶ 5.
52
Id. ¶ 2
8
Mr. Wu also identifies Mr. Shirey, as evidence of DTCC’s involvement in the fraud. Mr.
Wu contends that Mr. Shirey admitted that dfears1@dtcc.edu was from the DTCC’s system.53
That may be true but even an admission that the dfears1@dtcc.edu address was from the system
does not mean that Mr. Shirey made a material misrepresentation of a material fact constituting
fraud. Mr. Shirey communicated with Mr. Wu after Mr. Wu was defrauded. Mr. Shirey
communicated that the Fears Email was the result of a hacked account and that the account had
been deactivated. These statements are not false representations of fact made to induce Mr. Wu
to provide money to kennethjones040214@gmail.com
Mr. Wu admits that he does not know who sent the email. The initial email received
from dfears1@dtcc.edu contained information related to Chippewa Valley Technical College,
which is not associated with DTCC.54 The email address differs in form from other DTCC email
addresses. The Fears Email contains typos and poor grammar. Mr. Wu should have suspected
that the email was not from DTCC.55 Further, Mr. Wu argues he verified the job information
three times during the twenty-day period in question.56 However, no one associated with DTCC
verified the email as a legitimate job posting. To the contrary, everyone associated with DTCC
informed Mr. Wu this email was most likely a part of an email phishing scheme.57
In the Response, Mr. Wu attempts to clarify some of his statements regarding DTCC’s
fraudulent action. Despite these attempts, the facts Mr. Wu adds in the Response are not present
in the Amended Complaint and as such cannot be considered. The pleading standard for
evaluating a Rule 12(b)(6) motion requires the Court to only consider facts alleged in the
53
Id. ¶ 3.
54
DTCC’s Mot. ¶ 13.
55
Id.
56
Am. Compl. ¶ 3.
57
DTCC’s First Mot. ¶ 7-8.
9
complaint.58 Further, even if the facts from the Response were in the Amended Complaint, they
do not link DTCC, Mr. Wintead, or Mr. Shirey to any material misrepresentation. As such, even
if the Court were to consider the additional facts, the Amended Complaint still fails to satisfy the
requirements of Rule 9(b).
C. PLAINTIFF FAILS TO PLEAD JUSTIFIABLE RELIANCE
To demonstrate justifiable reliance “the misrepresentation forming the basis for the fraud
or negligent misrepresentation claim must be material, and the plaintiff generally cannot rely, for
example, on puffery, expressions of mere opinion, or representations that are obviously false.”59
Mr. Wu argues that if he had received a warning from DTCC, then he would not have fallen into
the email phishing scheme.60 Mr. Wu contends that his attempts to verify the job with DTCC
and the delayed response from DTCC act as his justifiable reliance. However, this evidence
appears to point to the fact that Mr. Wu should have been aware of the clearly false
representations made by the dtcc.edu email. Instead of waiting for confirmation from DTCC,
Mr. Wu moved forward with transferring money dfears1@dtcc.edu but sent to another email
address.61 Further, the Fears Email came from a DTCC email but contained “copyright”
information to Chippewa Valley Technical College.62
Under these facts, the Court cannot find justifiable reliance. Mr. Wu seems to be unsure
of the situation and asks for confirmation from DTCC. DTCC did not act before Mr. Wu
purchase the gift cards. Without verification, Mr. Wu cannot contend that he “justifiably” relied
on DTCC for anything. Mr. Wu had suspicions but acted without further information. DTCC
58
Windsor I, LLC v. CWCapital Asset Mgmt. LLC, 238 A.3d 863, 873 (Del. 2020).
59
Vichi v. Koninklijke Philips Elecs., 85 A.3d 725, 776 (Del. Ch. 2014) (internal citations omitted).
60
Am. Compl. ¶ 3.
61
Compl. ¶ 4.
62
DTCC’s Mot. ¶ 4.
10
did not respond in the timeframe that Mr. Wu wanted but that does not create justifiable reliance
in a situation where suspicions have been aroused. The scenario is just too illogical to create
justifiable reliance.
D. PLAINTIFF DOES NOT IDENTIFY WHAT DUTY DEFENDANT POSSESSES IN RELATION TO
PLAINTIFF TO ESTABLISH A CLAIM FOR NEGLIGENCE
A negligence claim requires there to be a legally defined duty.63 Generally, Delaware
follows the Restatement (Second) of Torts to determine whether one party owed another a duty
of care.64 Negligence is defined as “conduct which falls below the standard established by law
for the protection of others against unreasonable risk of harm.”65 However, “one who merely
omits to act” generally has no duty to act unless there is a special relationship between the
parties.66 Delaware does not require a university to protect its adult students based merely on the
university-student relationship.67 “The university is not an insurer of the safety of its students
nor a policeman of student morality, nonetheless, it has a duty to regulate and supervise
foreseeable dangerous activities occurring on its property.”68 To overcome this general
principle, a party must show that (i) a special relationship existed between the student and the
university or (ii) the university assumed a duty of care.69
Mr. Wu is a student at DTCC. However, Delaware does not recognize a general duty of
care owed by a university protect its adult students based purely on the student-university
63
Rogers v. Christina Sch. Dist., 73 A.3d 1, 7 (Del. 2013).
64
Id.65
Id. (quoting Restatement (Second) of Torts § 282).
66
Id. (quoting Restatement (Second) of Torts § 302 cmt. (a)).
67
Id.
68
Furek v. University of Delaware, 594 A.2d 506, 522 (Del. 1991).
69
Rogers, 73 A.3d at 7-11.
11
relationship.70 As such, Mr. Wu must demonstrate that DTCC either undertook a duty to protect
Mr. Wu or stood in a special relationship with Mr. Wu.71
Mr. Wu fails to offer any facts demonstrating that a special relationship existed between
Mr. Wu and DTCC. The Court has found no law that suggests that DTCC stood in loco parentis
to Mr. Wu. Mr. Wu admits that “Tim Winstead and DTCC, are not the swindler” but claims they
are “liable for their negligence.”72 Mr. Wu contends that because Mr. Winstead notified him
after Mr. Wu had already closed his Bank of America checking account, Mr. Winstead neglected
his duty.73 In addition, Mr. Wu argues that DTCC failed to have proper email protocols that
could have prevented the phishing scheme—e.g., DTCC’s failure to “admit severe loopholes in
their managements” and DTCC’s attempt to “cover up and distort the facts” has contributed to
the negligence claim.74 The Court does not find that these facts give rise to a claim against
DTCC for injuries caused to Mr. Wu out of a failure to properly supervise.
Mr. Wu contends that if he had received a warning from DTCC then he would not have
been deceived by the phishing scheme. Mr. Wu also claims that DTCC noticed the fraud
incident and did not take action to notify or protect the students and faculty of DTCC.75 In
essence, Mr. Wu argues that DTCC had a duty to act and failed to undertake that duty. These
arguments presume that DTCC expressly undertook a duty to protect students from phishing
scams. The record does not support a conclusion that DTCC voluntarily (or involuntarily)
assumed such a duty. Mr. Winstead did notify Mr. Wu that he was concerned Mr. Wu had fallen
victim to an email phishing scheme.76 Mr. Winstead’s actions are post-event actions and do not
70
Id. at 11 (quoting Furek, 594 A.2d at 519).
71
Id. at 7.
72
Am. Compl. ¶ 4.
73
Id. ¶ 1.
74
Id. ¶ 2.
75
Id. ¶ 3.
76
DTCC’s Mot. ¶ 8.
12
support the argument that DTCC voluntarily assumed a duty of care to act to protect Mr. Wu
from being contacted by third-parties intent on using the internet to commit fraud on students.
This is also true with Ms. Charrier and Mr. Shirey.
Mr. Wu is the unfortunate victim of an email scam. The perpetrator of that fraud is
unknown to the Court and the parties. This person is liable to Mr. Wu. Under Delaware law and
the facts, however, Mr. Wu fails to state claims for fraud or negligence that would extend the
liability of this third person to DTCC.
VI. CONCLUSION
For the foregoing reasons, the Court GRANTS the Motion. The Amended Complaint is
dismissed, with prejudice, for failing to state actionable claims for (i) fraud or (ii) negligence.
Dated: October 20, 2022
Wilmington, Delaware
/s/ Eric M. Davis
Eric M. Davis, Judge
cc: File&ServeXpress
Chenmou Wu (by mail)
13