Carney v. B & B Service Co. ( 2021 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
MICHAEL CARNEY, )
)
Plaintiff, )
) C.A. No. N19C-06-194 ALR
v. )
)
B & B SERVICE CO., MICHAEL )
BLOOM, DAVID BLOOM, and )
STEEL SUPPLIERS ERECTORS, )
INC., )
)
Defendants. )
Submitted: March 31, 2021
Decided: April 5, 2021
Upon Defendants’ Motion for Summary Judgment
on Tortious Interference and Punitive Damages
DENIED
Upon Defendant David Bloom’s Motion for Summary Judgment
DENIED
Upon Defendants’ Motion in Limine
DENIED
MEMORANDUM OPINION
Charles J. Brown, III, Esquire, Gellert Scali Busenkell & Brown, LLC, Wilmington,
Delaware, Attorney for Plaintiff.
Neil R. Lapinski, Esquire, Phillip A. Giordano, Esquire (argued), Gordon, Fournaris
& Mammarella, P.A., Wilmington, Delaware, Attorneys for Defendants.
Rocanelli, J.
Plaintiff Michael Carney owns a parcel of real estate located at 501 Front
Street in Wilmington, Delaware (“Carney’s Property”). The owners, operators and
beneficial owners of several commercial properties next to and in the vicinity of
Carney’s Property are the defendants in this lawsuit. Defendant B&B Service Co.,
a Delaware corporation, owns the property adjacent to Carney’s Property (“Adjacent
Property”). Defendant Steel Suppliers Erectors, Inc., a Delaware corporation,
operates a business in the nearby vicinity. Defendants Michael Bloom and David
Bloom are parties to this action in their individual capacities and as officers of B&B
and Steel Suppliers. (The four defendants, B&B, Steel Suppliers, Michael Bloom
and David Bloom are collectively referenced as “Defendants”).
A rail spur crossed Carney’s Property. There is a disputed factual question
regarding which parties used the rail spur and a disputed legal issue regarding
whether Defendants’ access to the rail spur was subject to an easement. The rail
spur was removed in the late 1980s or early 1990s.
The parties dispute possession and ownership of a portion of Carney’s
Property (“Disputed Parcel”). Carney claims that, after the rail spur was removed,
he used the Disputed Parcel to store machines that were too large to fit inside his
building. Defendants claim they have used the Disputed Parcel in connection with
their business operations.
1
This dispute also involves a 75-foot chain link fence which transverses
Carney’s Property in such a way as to separate the Disputed Parcel from the rest of
Carney’s Property (“Fence”). The Fence was erected by one or more of the
Defendants in or about the same location of the former rail spur. According to
Carney, the Fence was erected by one or more Defendants in 2007 or 2008.
Defendants contend the Fence was in place for a much longer period of time. Carney
removed the Fence at approximately the same time this lawsuit was filed.
Carney contends that he negotiated with a third party in 2018 (“Prospective
Buyer”) to sell Carney’s Property. According to Carney, Prospective Buyer
eventually did not purchase Carney’s Property as a result of Defendants’ use of and
representations regarding the Disputed Parcel. Among other things, Carney alleges
that Defendant Michael Bloom told Prospective Buyer that Defendants owned the
Disputed Parcel and that the Fence had been in place for 30 years.
Carney filed this lawsuit setting forth claims of tortious conduct relating to
Defendants’ use of the Disputed Parcel, as well as Carney’s lost sale to the
Prospective Buyer. In lieu of an answer, Defendants filed a motion to dismiss
Carney’s claim for tortious interference with business relationships (Count III). This
Court denied Defendants’ motion to dismiss Count III, ruling: “[a]t this stage in the
2
proceedings, Plaintiff has pleaded sufficient facts to support a claim for tortious
interference with business relationships.”1
Defendants now seek summary judgment on Carney’s claims for tortious
interference with business relationships, as well as Carney’s claim for punitive
damages. In addition, Defendants request a ruling that Carney may not offer
testimony at trial regarding the value of Carney’s Property. Finally, Defendant
David Bloom seeks judgment as a matter of law and dismissal from the case on the
grounds that David Bloom is not personally responsible for the actions of the
defendants which are corporate entities. Carney opposes Defendants’ motions. The
Court heard oral argument on March 31, 2021. This is the Court’s decision on the
pending motions.
DISCUSSION
I. Standard of Review for Summary Judgment
The Court may grant summary judgment only where the moving party can
“show that there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.”2 A genuine issue of material fact is one
that “may reasonably be resolved in favor of either party.”3 The moving party bears
1
Carney v. B & B Serv. Co., 2019 WL 5579490, at *2 (Del. Super. Oct. 29, 2019).
2
Super. Ct. Civ. R. 56(c).
3
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 259 (1986).
3
the initial burden of proof and, once that is met, the burden shifts to the non-moving
party to show that a material issue of fact exists.4 At the motion for summary
judgment phase, the Court must view the facts “in the light most favorable to the
non-moving party.”5 Summary judgment is only appropriate if Carney’s claims
against Defendants lack evidentiary support such that no reasonable jury could find
in his favor.6
A. Defendants are Not Entitled to Judgment as a Matter of Law on
Carney’s Claim for Tortious Interference with Prospective
Business Relationships
To establish a claim for tortious interference with business relationships, the
plaintiff must establish: “(1) the reasonable probability of a business opportunity;
(2) the intentional interference by the defendant with that business opportunity; (3)
proximate causation; and (4) damages, all of which must be considered in light of
the defendant’s privilege to compete or protect his business interests in a fair and
lawful manner.”7
4
Moore v. Sizemore, 405 A.2d 679, 680–81 (Del. 1979).
5
Brzoska v. Olson, 668 A.2d 1355, 1364 (Del. 1995).
6
See Hecksher v. Fairwinds Baptist Church, Inc., 115 A.3d 1187, 1200–05 (Del.
2015); Edmisten v. Greyhound Lines, Inc., 2012 WL 3264925, at *2 (Del. Aug. 13,
2012) (TABLE).
7
Orthopaedic Assocs. of S. Del., P.A. v. Pfaff, 2018 WL 822020, at *2 (Del. Super.
Feb. 9, 2018).
4
To meet the reasonable probability element, “a plaintiff ‘must identify a
specific party who was prepared to enter into a business relationship with the
plaintiff but was dissuaded from doing so by the defendant and cannot rely on
generalized allegations of harm.’”8 Carney has identified a potential buyer for
Carney’s Property, and Defendant Michael Bloom concedes that he spoke with the
potential buyer regarding the Disputed Parcel. Defendants are not entitled to a ruling
as a matter of law as to this element.
To meet the intentional interference element, “a plaintiff must prove that the
defendant’s interference with the plaintiff’s business opportunity was intentional and
wrongful or improper.”9 “An alleged interference in a prospective business
relationship is only actionable if it is wrongful.”10 Defendants argue that
Defendants’ interference with Plaintiff’s sale of the Property was not wrongful or
improper. Specifically, Defendants argue that Michael Bloom’s representations to
the third party merely conveyed a truth—the existence of a dispute over the
ownership of the Property—and were therefore neither wrongful nor improper.
However, Defendants are not entitled to a ruling as a matter of law on this
issue. It is well-settled that “[w]hether Plaintiffs have carried their burden to
8
Id. (brackets omitted) (quoting U.S. Bank Nat’l Ass’n v. Gunn, 23 F. Supp 3d 426,
436 (D. Del. 2014)).
9
Id.10
Agilent Techs., Inc. v. Kirkland, 2009 WL 119865, at *8 (Del. Ch. Jan. 20, 2009).
5
establish improper interference is typically a question of fact for the jury.”11 If
Carney establishes that one or more of Defendants are responsible for Carney’s lost
sale of Carney’s Property, then Carney may seek recovery of damages, including
lost profits that he would have earned but for the wrongful interference.12 As
discussed below, Carney will be permitted to testify as a lay person regarding the
value of his property.
Where, as here, there are genuine issues as to material facts, summary
judgment is inappropriate. Defendants are not entitled to judgment as a matter of
law on Carney’s claim of tortious interference with business relationships.
11
Lipson v. Anesthesia Servs., P.A., 790 A.2d 1261, 1287–88 (Del. Super. 2001).
12
Empire Fin. Servs., Inc. v. Bank of N.Y. (Del.), 900 A.2d 92, 98 (Del. 2006). In
Empire, the Delaware Supreme Court construed an interference with an existing
contract as wrongful interference with a prospective contractual relationship and
found that a plaintiff may recover for the lost profits that it would have earned, but
for the defendant’s wrongful interference. See id. The Empire Court cited to the
Restatement (Second) of Torts § 766B which provides:
One who initially and improperly interferes with another’s prospective
contractual relation . . . is subject to liability to the other for the
pecuniary harm resulting from loss of the benefits of the relation,
whether the interference consists of (a) inducing or otherwise causing
a third person not to enter into or continue the prospective relation or
(b) preventing the other from acquiring or continuing the prospective
relation.
Id. at 98 n.20; Restatement (Second) of Torts § 766B.
6
B. Defendants are Not Entitled to Judgment as a Matter of Law on
Carney’s Claim for Punitive Damages
Defendants contend that they are entitled to summary judgment on Carney’s
claim for punitive damages. The purpose of punitive damages is two-fold: (1) to
punish wrongdoers and (2) to deter others from similar conduct in the future.13
Punitive damages are recoverable “in situations where the defendant’s conduct,
though unintentional, has been particularly reprehensible, i.e. reckless, or motivated
by malice or fraud,”14 or where conduct “exhibits a wanton or willful disregard for
the rights of plaintiff.”15 Conduct is willful or wanton if it reflects a “conscious
indifference” or an “I don’t care” attitude.16 The question of whether conduct meets
the standard for an award of punitive damages is typically a question for the jury to
decide.17
Viewing the facts in the light most favorable to Carney,18 the non-moving
party, there are genuine issues of material fact regarding the conduct of one or more
13
Jardel Co. v. Hughes, 523 A.2d 518, 529 (Del. 1987).
14
Id.15
Cloroben Chem. Corp. v. Comegys, 464 A.2d 887, 891 (Del. 1983).
16
Id.17
Jardel Co., 523 A.2d at 527; see also Brown v. United Water Del., Inc., 3 A.3d
272, 276 (Del. 2010) (“Ordinarily, questions of gross negligence and willful or
wanton conduct are for the jury and are not susceptible of summary adjudication.”);
Eustice v. Rupert, 460 A.2d 507, 509 (Del. 1983) (“The question of wanton conduct
(as with a question of negligence) is ordinarily one for the trier of fact.”).
18
See Brzoska, 668 A.2d at 1364.
7
Defendants. Accordingly, Defendants are not entitled to judgment as a matter of law
on Carney’s claim for punitive damages.
C. Defendant David Bloom is Not Entitled to Judgment as a Matter of
Law
Defendant David Bloom seeks summary judgment and dismissal from this
action. David Bloom contends that he is vice president of Steel Suppliers and that,
as such, he is responsible for accounts payable and accounts receivable but that he
has no responsibility for or knowledge of equipment storage on the Disputed Parcel.
The personal participation doctrine provides that “a corporate official cannot
shield himself behind a corporation when he is an actual participant in the tort.”19
The “[p]ersonal participation doctrine can be triggered if an agent actively
participates, consents, or ratifies a tortious scheme.”20 Furthermore, “the personal
participation doctrine attaches to corporate officers for torts in which they ‘commit,
participate in, or inspire, even though they are performed in the name of the
corporation.’”21
There are genuine issues of materials fact in dispute regarding David Bloom’s
role and his knowledge. “It is the exclusive province of the jury, as the trier of fact,
19
Aug. v. Hernandez, 2020 WL 95658, at *3 (Del. Super. Jan. 6, 2020).
20
Id. (emphasis added) (quoting Sens Mech., Inc. v. Dewey Beach Enters., Inc., 2015
WL 4498900, at *3 (Del. Super. June 23, 2015)).
21
Id. (quoting Sens Mech., Inc., 2015 WL 4498900, at *3).
8
to evaluate the credibility of witnesses. The jury is entitled to base its verdict on the
testimony that it believes to be credible.”22 Therefore, viewing the record in a light
most favorable to Carney, genuine issues of material fact remain and summary
judgment is inappropriate.
II. Carney May Testify as a Lay Witness Regarding the Value of
Carney’s Property
Defendants challenge Carney’s proposed testimony at trial regarding the value
of Carney’s Property. Since 1960 Delaware has recognized a property owner’s right
to give an opinion as to the value of real estate.23 The so-called “record owner rule”
is based on the theory that landowners have special knowledge concerning the value
of their own land.24 Generally, Delaware Rule of Evidence 70125 governs the scope
22
Pesta v. Warren, 2005 WL 3453825, at * 3 (Del. Dec. 14, 2005) (TABLE).
23
E. Shore Nat. Gas Co. v. Glasgow Shopping Ctr. Corp., 2007 WL 3112476, at *2
(Del. Super. Oct. 3, 2007) (citing State ex rel. Smith v. 0.15 Acres of Land, 164 A.2d
591, 593 (Del. 1960), aff’d sub nom. State ex rel. Smith v. 0.15 Acres of Land, More
or Less, in New Castle Hundred, New Castle Cty., 169 A.2d 256 (1961)).
24
State ex rel. Sec’y of Dep’t of Transp. v. Mulholland, 1994 WL 680002, at *2 (Del.
Super. Sept. 16, 1994).
25
Delaware Rule of Evidence 701 provides:
If a witness is not testifying as an expert, testimony in the form of an
opinion is limited to one that is:
(a) rationally based on the witness’s perception;
(b) helpful to clearly understand the witness’s testimony or to
determining a fact in issue; and
(c) not based on scientific, technical, or other specialized knowledge
within the scope of Rule 702 [which governs testimony provided by
expert witnesses].
D.R.E. 701.
9
of lay witness testimony. However, since the adoption of the Delaware Rules of
Evidence in 1980, this Court repeatedly has upheld the record owner rule26 which
provides that a party may testify as to the estimated value of his or her own property.
Accordingly, the record owner rule is well-established in Delaware jurisprudence.27
The limitations of a property owner’s ability to testify as to the value of his or
her property was directly addressed in Eastern Shore Natural Gas Co. v. Glasgow
Shopping Center Corp.28 as follows:
In order to testify, the landowner must be familiar with the elements of
the property. Unless the Court finds that the owner has no knowledge
of the value of the property, the owner will be permitted to testify. If
the owner bases the opinion on the fair market value of comparable
properties, the owner must establish familiarity with the comparable
properties. The owner need not possess special skills in order for the
testimony to be admissible.29
26
See E. Shore Nat. Gas Co., 2007 WL 3112476, at *2 (citing Cingular Pa., LLC v.
Sussex Cnty. Bd. of Adjustment, 2007 WL 152548, at *8 (Del. Super. Jan. 19, 2007));
see also State ex rel. Sec’y of Dep’t of Transp., 1994 WL 680002, at *1–2 (The
owner of property “can give his opinion as to the fair market value of the property
before the taking” and the owner’s familiarity with the property creates “a species
of special knowledge, with respect to its value.”) (citing Ligon v. Brooks, 196 A.
200, 201 (Del. Super. 1937)); Cronin v. Bd. of Assessment Rev. for New Castle Cnty.,
1992 WL 52181, at *2 (Del. Super. Feb. 26, 1992) (“Delaware law permits a
property owner to give his opinion as to the value of his real estate.”).
27
E. Shore Nat. Gas Co., 2007 WL 3112476, at *2.
28
Id.29
Id. (footnotes omitted).
10
The Court further clarified that the landowner’s testimony “must be based on her
personal knowledge of the property, not statistics or equations normally utilized by
a certified appraiser.”30
Therefore, consistent with the record owner rule, Carney may testify as to the
value of Carney’s Property as long as a proper foundation is laid regarding Carney’s
personal knowledge.
CONCLUSION
Accordingly, for the reasons stated herein, Defendants’ motion for summary
judgment on Carney’s claims for tortious interference with business relationships
and for punitive damages must fail because there are genuine issues of material fact
in dispute and Defendants are not entitled to judgment as a matter of law. In
addition, based on the record before the Court and in consideration of the personal
participation doctrine, Defendant David Bloom is not entitled to summary judgment.
Finally, consistent with the record owner rule, Carney may testify as to the value of
Carney’s Property.
30
Id.11
NOW, THEREFORE, this 5th day of April 2021, for the reasons stated
herein, (i) Defendants’ Motion for Summary Judgment on Tortious
Interference and Punitive Damages is hereby DENIED; (ii) Defendant David
Bloom’s Motion for Summary Judgment is hereby DENIED: and (iii)
Defendants’ Motion in Limine is hereby DENIED.
IT IS SO ORDERED.
Andrea L. Rocanelli
The Honorable Andrea L. Rocanelli
12