IN THE SUPREME COURT OF THE STATE OF DELAWARE
ICATECH CORPORATION and §
EMPRESAS ICA, S.A.B. DE. C.V., §
§ No. 121, 2021
Defendants and Counterclaim §
Plaintiffs Below, § Court Below – Superior Court
Appellants, § of the State of Delaware
§
v. §
§ C.A. No. N17C-09-163
PAUL V. FACCHINA, SR., individually §
and as Sellers’ Representative, §
§
Plaintiff and Counterclaim §
Defendant Below, §
Appellee. §
Submitted: October 27, 2021
Decided: December 9, 2021
Before SEITZ, Chief Justice; TRAYNOR and MONTGOMERY-REEVES, Justices.
ORDER
After careful consideration of the parties’ briefs and the record on appeal, and after
oral argument, it appears to the Court that:
(1) On June 28, 2013, Appellant ICATech Corporation (“ICATech”),
bought Facchina Companies, a portfolio of construction companies, from Appellee
1
Paul V. Facchina, Sr., with Appellant Empresas ICA acting as a guarantor.1 The
transaction closed on April 14, 2014.2
(2) The sale was executed through a purchase and sale agreement (the
“SPA”) in which Facchina made a number of representations.3 In particular, and at
issue in this case, Facchina represented that Facchina Companies had not “taken any
action or entered into or authorized any Contract or transaction other than in the
ordinary course of business and consistent with past practice that has not already
been disclosed hereunder” since December 31, 2012. 4
(3) On January 24, 2013, Facchina Construction of Florida (“FCF”), one
of the Facchina Companies, entered into a contract to construct the Grove at Grand
Bay (the “Grove”), a high-rise condominium in Florida.5 An amendment to this
contract was signed on May 30, 2013.6
(4) FCF had an operational policy of assigning the concrete work for its
construction projects to only one subcontractor.7 To do otherwise is referred to in
the construction industry as “breaking up” that portion of the work. For the Grove
project, an FCF employee broke up the concrete work between three separate
1
Opening Br. 1.
2
Id.
3
App. to Opening Br. A0624-55 (hereafter “A_”).
4
A0630.
5
A0431-62; Opening Br. 2.
6
A1186-87.
7
Facchina Constr. Litigs., 2020 WL 6363678, at *8 (Del. Super. Ct. Oct. 29, 2020).
2
subcontractors, in spite of the operational policy and Facchina’s express instruction
to the employee not to break up the concrete portion of the project.8 The Grove
project experienced numerous scheduling delays and performance difficulties in
relation to the concrete work.9
(5) In June 2018, the Appellants brought a fraud claim against Facchina.10
The Appellants allege that Facchina committed fraud by representing that the
Facchina Companies had been operating in the ordinary course of business despite
knowing FCF had broken up the concrete work for the Grove project in violation of
its operational policy.11 In other words, the Appellants allege that Facchina knew
FCF was operating outside the ordinary course of business, but Facchina knowingly
represented otherwise in the SPA in order to fraudulently induce them into buying
Facchina Companies.12
(6) In order to prove common law fraud, a plaintiff must show: (a) a false
representation of a material fact, (b) knowledge that the representation was false or
made with reckless indifference to its truth, (c) intent for the plaintiff to rely on the
8
Id.; Answering Br. 10.
9
A1528 at 58:14-21.
10
Answering Br. 7.
11
Opening Br. 25-40.
12
Id.
3
fraudulent misrepresentation, (d) justifiable reliance on the fraudulent
misrepresentation, and (e) damages as a result of the fraudulent misrepresentation.13
(7) After reviewing the record, we conclude that the Appellants did not
prove fraud. We reach this ruling based solely on the Appellants’ inability to prove
the second element of the fraud claim—that Facchina knew the representation was
false or made with reckless indifference to its truth.
(8) The Superior Court weighed the evidence, assessed the credibility of
the witnesses, and concluded that, even if the representation was false, Facchina did
not know the FCF employee had broken up the concrete work for the Grove project
until after the closing of the sale of Facchina Companies to the Appellants. 14 This
finding was based on evidence in the record.15 Appellants, however, point to other
evidence in the record, arguing that it shows that Facchina knew the concrete work
for the Grove project had been broken up before closing.16 In particular, Appellants
claim that Facchina reviewed three documents connected with the Grove project that
show the project’s concrete work had been broken up.17 They believe that “Facchina
could not possibly have reviewed these three documents without recognizing that
13
See Harman v. Masoneilan Int’l., Inc., 442 A.2d 487, 499 (Del. 1982); Restatement (Second) of
Torts § 525 (Am. L. Inst. 1977).
14
Facchina Constr. Litigs., 2020 WL 6363678, at *15.
15
Id.
16
Opening Br. 31.
17
Id.
4
the concrete work had been broken-up.”18 Nothing in the record confirms
Appellants’ assumption.19 But even if the evidence identified by the Appellants
could suggest that Facchina knew FCF’s concrete work had been broken up,
“‘[w]here there are two permissible views of the evidence, the factfinder’s choice
between them cannot be clearly erroneous.’”20 Thus, the Superior Court did not err
in determining that Appellants failed to show that Facchina knew the representation
was false or made with reckless indifference to its truth.
(9) Because showing each element of fraud is necessary to a successful
claim, the Appellants’ inability to satisfy this element is dispositive. Accordingly,
the Court affirms the Superior Court’s holding that the Appellants failed to prove
fraud on this limited basis. We do not address the Appellants’ remaining arguments.
NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior Court is
AFFIRMED.
BY THE COURT:
/s/ Tamika R. Montgomery-Reeves
Justice
18
Id.
19
Oral Argument at 9:28-13:08 (Oct. 27, 2021),
https://livestream.com/accounts/5969852/events/9878242/videos/226912168/player.
20
RBC Cap. Mkts., LLC v. Jervis, 129 A.3d 816, 849 (Del. 2015) (quoting Bank of N.Y.
Mellon Tr. Co., N.A. v. Liberty Media Corp., 29 A.3d 225, 236 (Del. 2011)).
5