Wade v. Jessop's Tavern, Inc.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

BRIAN WADE and PAULA WADE,
Plaintiffs,

V.

JESSOP’S TAVERN, INC.,

Defendant/Third-Party C.A. No. Nl6C-O4-l()7 VLl\/l

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WASTE INDUSTRIES, LLC and
WASTE INDUSTRIES OF
DELAWARE, LLC,

Third-Party Defendants.

Submitted: November 14, 2016
Decided: December 6, 2016

Q_R__D_EB
Upon Considemtion of Third-Party Defena’ants ’ Motion to Dismz`ss, GRANTED.
AND NOW this 6th day of December, 2016, upon consideration of Third-
Party Defendants, Waste lndustries, LLC and Waste lndustries of Delaware, LLC’s
(hereinafter “Waste”) Motion to Dismiss, Third-Party Plaintiff, Jessop’s Tavern,
Inc.’s (hereinafter “Jessop’s”) response thereto, and the parties’ positions at oral
argument, IT IS HEREBY ORDERED that Waste’s l\/lotion is GRANTED for

the following reasons:

l. Plaintiffs, husband and Wife, filed this premises liability action solely
against Jessop’s alleging that Plaintiff Brian Wade (hereinafter “Mr. Wade”)
suffered injuries as a proximate cause of Jessop’s failure to exercise reasonable
care in discovering and remedying a concealed, dangerous condition on its
property. l\/lr. Wade Was employed as a trash collector With Waste, charged With
removing trash from Jessop’s trashcans pursuant to a service agreement between
Waste and Jessop’s. On April 22, 2014, Mr. Wade, While in the scope of his
employment, allegedly suffered injuries after his foot caught a concealed hole on
Jessop’s property.

2. Plaintiffs’ Complaint Was filed on April l3, 2016. Jessop’s thereafter
impleaded Waste on July 6, 20l6. Jessop’s alleges, first, that Waste expressly
agreed to indemnify Jessop’s for Waste’s allegedly negligent training and/or
supervision of l\/lr. Wade in the performance of his duties under the operative
service agreement To Wit, Jessop’s contends that Waste-prior to the execution
of the service agreement_-knew of this dangerous condition on Jessop’s property.l
Thus, Jessop’s argues that Waste’s negligence may have proximately caused
Plaintist injuries and, consequently, Waste may be held liable under a theory of

express indemnification for any damages recoverable by Plaintiffs.

1 . . . . . .
This representation Was not memorialized m the Service agreement

2

3. Alternatively, Jessop’s argues that it has stated a viable claim for
implied indemnification based on Waste’s putative obligation to perform its duty
under the service agreement in a workmanlike manner. Though the service
agreement is silent as to any express covenant by Waste to perform its duty under
the agreement in a workmanlike manner, Jessop’s argues that the nature of the
agreement carries with it this implied promise on the part of Waste.

4. On a motion to dismiss for failure to state a claim under Rule
l2(b)(6), all well-pleaded allegations in the complaint must be accepted as true.2
Even vague allegations are considered well-pleaded if they give the opposing party
notice of a claim.3 The Court must draw all reasonable inferences in favor of the
non-moving party;4 however, it will not “accept conclusory allegations
unsupported by specific facts,” nor will it “draw unreasonable inferences in favor
of the non-moving party.”5 Dismissal of a complaint under Rule l2(b)(6) must be

denied if the non-moving party could recover under “any reasonably conceivable

2 Spence v_ Funk, 396 A.2d 967, 968 (Dei. 1978). see also DEL. supi~:R. CT. Civ. R. iz(b)(6).

3 In re Gen. Motors (Hughes) S ’holder Litig., 897 A.2d l62, 168 (Del. 2006) (quoting Savor, Inc.
v. FMR Corp., 812 A.2d 894, 896-97 (Del. 2002)).

414

5 Price v. E.I. DuPont de Nemours & Co., 26 A.3d l62, l66 (Del. 20ll) (internal citation
omitted).

set of circumstances susceptible of proof under the complaint.”6 However,
dismissal should be granted where no set of facts could support the claim asserted
and the moving party is entitled to dismissal as a matter of law.7

5. Initially, the Court determines that the present Motion should be
adjudicated on a l2(b)(6) standard and not_-as Jessop’s contends_under a
summary judgment standard.8 Jessop’S included in its opposition to the l\/lotion an
affidavit from Jessop’s owner to suggest that his “business provided information to
the salesman for Waste . . . about the condition of the area” before entering into the
Service Agreement.9 Where extrinsic evidence is injected into a motion to dismiss,
the Court may convert the motion to a Rule 56 motion for summary judgment.lo
However, the Court should be slow to convert a motion to dismiss to a motion for
summary judgment, particularly where the extrinsic evidence is unnecessary to
resolve the motion to dismiss.ll The Court finds that Jessop’s affidavit simply

restates the allegations found in the Third-Party Complaint and does not augment

6 Spence, 396 A.2d at 968 (citing Klez`n v. Sunbeam Corp., 94 A.2d 385 (Del. 1952)).
7 Klem, 94 A.2d at 391.
8 See DEL. SUPER. CT. Civ. R. 56.

9 See Jessop’s Br. at Ex. 3.

‘0 Cf. Apprzva s’holder Lm'g. CO,, LLC v. EV3, mc., 937 A.zd 1275, 1288 (Del. 2007)
(discussing “sua sponte conversion” to Rule 56 standard of review).

“ See id. (quoting CHARLEs ALAN WRIGHT & ARTHUR R. MILLER, 5C FED. PRAC. & PRoC.
§ 1366, at 149 (3<1 ed. 2004)).

the indemnification issues present in Waste’s l\/Iotion. Therefore, the Court
reviews Waste’s Motion under Rule l2(b)(6).

6. First, the Court addresses Waste’s argument that it cannot be held
liable under the express indemnity provision of the service agreement Delaware
adheres to the objective theory of contracts12 ln interpreting this service
agreement, the Court will look to the four corners of the contract and seek to
discern the parties’ objective intent when entering into the contract13 The
indemnification provision at issue in the Motion states in part:

INDEMNITY: [Waste] agree[s] to lndemnify and hold
[Jessop’s] harmless from and against any and all claims,
demands, actions, fines, penalties, expenses and
liabilities (including reasonable attomeys’ fees)
(“Losses”) incurred by [Jessop’s] as a result of bodily
injury (including death), property damage, or violation of
law, to the extent caused by any negligent act, negligent
omission or willful misconduct of [Waste], which occurs
during [Waste’s] provision of services to [Jessop’s] under
this Agreement; provided that [Waste’s]
Indemnification obligation Will not apply to
occurrences involving Waste . . . or involving the
negligence or Willful misconduct of [Jessop’s],
[Jessop’s] employees, representatives and contractors
[Jessop’s] agree[s] to indemnify and hold [Waste]
harmless from and against any and all Losses incurred by
[Waste] arising out of [Jessop’s] breach of this
Agreement; the negligent acts[,] omissions or willful

12 See, e.g., Loppert v. Wina'sorTech, lnc., 865 A.2d 1282, 1285 (Del. Ch. 2004) (quoting lndus.
Am., lnc. v. Fulton lndus., Inc., 285 A.2d 412, 415 (Del. 1971)).

13 See GMG Capital Investmems, LLC v. Al‘henian Venture Partners [, L.P., 36 A.3d 776, 779
(Del. 2012) (quoting Paul v. Delol`tle & Touche, LLP, 974 A.2d 140, 145 (Del. 2009)).

misconduct of [Jessop’s], [Jessop’s] employees,
representatives or contractors . . .

7. Waste argues dismissal is appropriate because the terms of the above
provision expressly preclude indemnification for Jessop’s own negligence In
other words, in the event Jessop’s was found liable to Plaintiffs for any alleged
negligence, Waste contends that Jessop’s would be seeking indemnification for its
own negligence; a result that is contractually prohibited by the indemnity provision
in the service agreement This Court agrees.

8. Parties to a contract may provide that one party agrees to indemnify
the other for his or her negligence15 Express indemnification for one party’s
negligence must be clear and unequivocal16 Though the parties need not use exact
terms, the law “will not imply a right of indemnity where the parties have entered

9917

into a written contract with express indemnification Because “contracts

relieving a party of its own negligence are strictly construed,” an indemnity

14 Jessop’s Br. at Ex. 2 (emphasis added). Notably, in the Third-Party Complaint, Jessop’s
quotes a portion of the indemnity provision, but omits various highlighted and important portions
of the second clause (without proper indication) beginning with “provided that. . . .” See Third-
Party Complaint at 11 11. This omission, whether intentional or inadvertent, is misleading

15 See, e.g., Precz`sl`on Az'r, Inc. v. Slandard Chlorz`ne ofDel., Inc., 654 A.2d 403 (Del. 1995);
Hollingsworth v. Chrysler Corp., 208 A.2d 61 (Del. Super. 1965).

!6 See Hollz'ngsworth, 208 A.2d at 241.
‘7 Dezze owing & Assocs., LLP v. lelar Elevazor serv CO., 840 A.zd 1244, 1251 n.iz (Del.

2004) (quoting Rock v. Del. Elec. Coop., lnc., 328 A.2d 449, 455 (Del. Super. 1974)). See also
Hollingsworth, 208 A.2d at 241-42.

provision that is silent to a situation involving contributory negligence will not be
stretched to accommodate the party seeking express indemnification18

9. In resolving Waste’s express indemnity argument, the Court is
persuaded by Waller v. J.E. Brennemcm Co.19 Granting dismissal of the third-party
complaint, the Waller Court held that a similar indemnity provision failed to
consider a circumstance where both parties may have been contributorily negligent
for the injuries of third-party defendant’s employee. As such, the express
indemnity agreement did not act to indemnify the third-party plaintiff for its own
alleged negligence toward the plaintiff/third-party defendant’s employee.20

10. Jessop’s response to Waller is to avoid its implications and, instead,
argue that Waste may still be held liable for its allegedly negligent training and
supervision of Mr. Wade.21 Jessop’s focuses heavily on the indemnity provision’s
language in the first clause: Waste “agrees to indemnify [Jessop’s] . . . to the
extent caused by any negligent act, negligent omission or willful misconduct of
[Waste]. . . .” If one were to stop there, Jessop’s argument may hold water.

However, and most importantly, the second clause of the provision clearly excises

18 Waller v. JE. Brenneman Co., 307 A.2d 550, 551-52 (Del. Super. 1973).
19 307 A.2d 550 (Del. Super. 1973).

20 The Waller Court also rejected an implied indemnity claim similar to the one presented in this
case. See id. at 552-53.

21 Although Jessop’s cites to Waller’s on-point holding, Waller appears only once in Jessop’s
brief: in its final footnote See Jessop’s Br. at 11 10, n.4.

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Waste’s duty to indemnify in situations of Jessop’s own negligence “provided
that [Waste’s] Indemnif“ication obligation Will not apply to occurrences . . .
involving the negligence or Willful misconduct of [Jessop’s]. . . .”

11. Jessop’s attempts to use a similarly unsuccessful argument as did the
third-party plaintiff in Waller: that Waste’s “act or omission”-allegedly failing to
disclose a dangerous condition on Jessop’s property»~was a proximate cause of
Mr. Wade’s injuries

12. Jessop’s argument appears to meld theories of contribution and
indemnification in an attempt to overcome Waste’s Motion to Dismiss.
Contribution, however, is clearly foreclosed under the Supreme Court’s holding in
Precision Air, Inc. v. Standard Chlorz`ne of Delaware22 Jessop’s attempt to
implead Waste on a theory that Waste could also have caused Plaintiff" s injuries
essentially casts Waste_l\/Ir. Wade’s employer- as a joint tortfeasor to Jessop’s
alleged negligence This is categorically prohibited under Precz`sion Air.23

13. Furthermore, Jessop’s indemnification theory is likewise unavailing
because the express language in the indemnity provision prohibits Waste from
indemnifying Jessop’s where Jessop’s suffers damages as a result of its own

negligence If Jessop’s is held liable on Plaintiffs’ claims-as it must in order for

22 654 A.2d 403 (Del. 1995).

23 see id. at 406-07.

Jessop’s to suffer any damages-Jessop’s liability will be directly attributable to its
own failure to exercise reasonable care when l\/Ir. Wade legally entered onto
Jessop’s property. This is clear from the fact that Plaintiffs’ sole claim is one for
Jessop’s failure to reasonably maintain its own property. Pursuant to the second
clause of the indemnity provision, whatever damages Jessop’s suffers as a result of
a finding against Jessop’s is, ipso facto, directly attributable to Jessop’s own
negligence

14. Delaware law has consistently recognized that parties can, and have,
agreed that one party to a contract will bear the risk of all loses, regardless of
which party may be at fault for the loss24 Here, the parties did just that. Unlike
the cases of Precz`sion Az'r and Waller, where the express provisions of their
agreements were subject to further interpretation, here, the scope of Waste’s
obligation is clear. Any further analyses regarding the express provision is
unnecessary This Court finds that any additional factual record that might be
developed would not serve to further determine the contractual obligations
between Jessop’s and Waste; the obligations are established As such, this Court
finds Waste cannot be held liable under the express indemnity provision of the

service agreement as a matter of law.

24 smze v. Inzersmre Amiesi¢e Corp., 292 A.zd 41, 44 (Dei 1972).

15. Finally, Jessop’s ancillary argument that Waste should be held to have
impliedly indemnified Jessop’s notwithstanding the indemnity provision is also
without merit. Where an express indemnity provision exists between the parties to
an agreement, the Court will not enlarge the right to indemnity by implication.25 ln
Precisz`on Az`r, the Supreme Court permitted a third-party indemnity claim against
an employer where the employer expressly agreed to: “(i) perform work in a
workmanlike manner; and (ii) indemnify the third-party-indemnitee for any claims
arising from the employer-indemnitor’s own negligence.”26 Crucial in Precz'sz'on
Az'r was the parties’ express contractual agreement that the third-party defendant
would perform under the contract in a workmanlike manner and indemnify the
third-party plaintiff for the third-party defendant’s own negligence27 As stated,
that is not the case in the agreement between Waste and Jessop’s. Where the
parties agreed to their indemnification commitments, this Court will not impose
implied obligations to extend beyond their agreement

For the above stated reasons, Third-Party Defendants, Waste lndustries,

LLC and Waste lndustries of Delaware, LLC’s l\/lotion to Dismiss the Third-Party

25 see R@ck v. Del. Elec. Co@p., lnc., 328 A.zd 449, 455 (Del. super 1974).
26 654 A.zd at 407.

27 See Davl`s v. R.C. Peoples, lnc., 2003 WL 21733013, at *4 (Del. Super. July 25, 2003).
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Complaint is GRANTED.

OCI
CCI

IT IS SO ORDERED.

Prothonotary
All Counsel of Record (via e-filing)

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Judge Vivian L. Me/dj/rfif a
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