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denying motion for summary judgment for failure to sue within the statutory period because the Court "could not say as a matter of law" when the injury occurred
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02C-03-221-JOH.
Submitted: August 17, 2006
November 27, 2007.
Upon Motion of Defendants Bartron for Summary Judgment on the Grounds of Statute of Limitations — DENIED.
Upon Motion of Defendant Lois Bartron for Summary Judgment — GRANTED.
Upon Motion of Defendants Bunch and RE/MAX Realty for Summary Judgment on the Grounds of Vicarious Liability — DENIED.
Upon Motion of Defendants for Summary Judgment on the Grounds of Real Estate Commission Regulations Creating a Private Cause of Action — GRANTED.
Upon Motion of Defendant Bunch on the Grounds of Personal Liability — GRANTED.
Upon Motion of Defendants Bunch and RE/MAX Realty on the Grounds of Insurance Coverage-DENIED.
Bayard J. Snyder, Esquire, of Snyder Associates, Wilmington, Delaware, attorney for plaintiffs.
C. Scott Reese, Esquire, of Cooch Taylor Wilmington, Delaware, attorney for defendants Bunch and RE/MAX Realty, Ltd.
Thomas C. Marconi, Esquire, of Losco Marconi, Wilmington, Delaware attorney for defendants Wayne and Lois Bartron.
MEMORANDUM OPINION
On March 30, 1999, Loretta Eller, attorney-in-fact for her mother, Margaret Eller, consummated the sale of her mother's home. The price was $96,000. The listing agent was Wayne Bartron, who at that time worked at RE/MAX Realty, Ltd. The original listing agreement stated a price of $152,000. Unknown to the Ellers, their buyer sold the property on the same day to another person. The sales price was $130,000. Until several months later, the Ellers were unaware of this resale, the purchase price and that Wayne Bartron had solicited and agreed to be paid by the Ellers' buyer for his role in the second sale.
As a result, the Ellers have filed this action. Lois Bartron's name appears on the original listing agreement. Wendy Bunch was added as a defendant since she was the sole stockholder of RE/MAX Realty and, apparently, the lead broker in the firm.
The Ellers' claims by Count are:
I. Breach of contract (although it is not clear what exactly is the claim against Wayne and Lois Bartron and RE/MAX Realty).
II. Breach of Fiduciary Duty against the Bartrons and RE/MAX Realty.
III. Breach of Consumer Fraud Act against the Bartrons and RE/MAX Realty.
IV. Breach of Real Estate Commission Rule 10.1 against the Bartrons and RE/MAX Realty.
V. Breach of Real Estate Commission Rule 7.5.1 against the Bartrons and RE/MAX Realty.
VI. Breach of Real Estate Commission Rule 1.3.1 against Bunch and RE/MAX Realty.
VII. Breach of Real Estate Commission Rule 1.3.2 against Bunch and RE/MAX Realty.
VIII. Breach of statutory provisions regulating broker/agent conduct against the Bartrons and RE/MAX Realty.
24 Del. C. § 2912(a)(4) and (9).
All of the defendants have filed motions for summary judgment:
1. The Bartrons as to all counts in which they are named on the grounds that the Ellers' complaint is time barred.
2. Lois Bartron on the ground that she was not a party to any contract and/or did not participate in any substantive way in any transaction.
3. Bunch and RE/MAX on the basis they have no vicarious liability for the Bartrons' actions.
4. Bunch and RE/MAX Realty as to counts VI and VII of the Ellers' complaint on the basis that the alleged Commission Regulation and statutory violations do not create a private cause of action. The Bartrons have joined in that motion.
The Bartrons, in turn, filed a cross-claim against Bunch and RE/MAX. They allege she assured them that there would be certain insurance coverage for them. This alleged assurance came after the Ellers had initiated disciplinary proceedings against the Bartrons. They allege, however, coverage has been denied. Bunch and RE/MAX have moved for summary judgment on that claim on the basis there was no misrepresentation.
Factual Background
Margaret Eller owned a property at 2134 Coventry Drive in suburban Wilmington. Loretta Eller, her daughter, held power of attorney for her mother. On July 7, 1998, Loretta Eller signed a listing agreement to sell the property. The price indicated was $152,000. Defendants Bartrons and RE/MAX Realty are named as brokers on the preprinted listing agreement. The only signature on it or at least on the copy supplied to the Court, is that of Loretta Eller.Loretta Eller (to be referred hereafter as Eller since her mother had no active role in this case) signed an agreement of sale on January 28, 1999. She did this after apparently declining to sign it on January 22nd when Wayne Bartron first presented it to her. The price was $96,000. The house was to be sold in an "as is" condition. The typed in name of the buyer was "Pierce/O'Neill, Ltd." Handwritten after the typed name were the words "and/or Assigns." The full circumstances of Eller's original hesitation and later execution of the contract are not before the Court. What little evidence which has been presented indicates Wayne Bartron came to her house around ten to ten-thirty at night with the proposed sales agreement. She had been asleep and woke up to speak to Wayne Bartron and sign the sales agreement.
The meager record shows Eller was not happy with the price. She alleges Wayne Bartron pressured her and that she was not fully awake and appreciative when she signed the agreement. The record does show, however, that the next day she was unhappy about the price. This feeling prompted her to call her family attorney to see if there were some way out of the contract. That attorney was not in that day, and she never spoke to him or tried to speak to any other lawyer. She says she felt bound by the contract, however.
The sale of the property was finalized on March 30, 1999. On that same day O'Neill/Pierce sold the house to a Douglas J. Knierim for $130,000. There is no documentation presented to the Court, but the Ellers allege the "Bartrons" were also the agents for this second transaction. Wayne Bartron did not inform Eller that he had asked for and been promised compensation by O'Neill/Pierce for the second sale.
The record presented is incomplete whether he was a listing agent under contract or had solicited and been promised to be paid without a formal listing agreement.
Eller later learned of the second sale and Wayne Bartron's compensation and lodged a formal complaint in 2000 with the Real Estate Commission. The Commission held a hearing on January 30, 2001 regarding Wayne Bartron's conduct, after which it issued its ruling.
The Commission's decision reveals additional information not otherwise appearing in any documents or depositions in this case. Brian Pierce of Pierce/O'Neill, Ltd., visited the Eller house several times before offering to buy it. On at least one occasion, he brought a prospective buyer (to whom he would sell) with him. He determined much repair work was needed. The Commission's decision indicates Wayne Bartron and Eller were present during a conversation in which Pierce discussed the need for and expense of the many repairs. The sales agreement she ultimately signed on January 28th stated the house was being sold "as is." This provision and the probable significant repair cost led her not to undertake any repairs. On January 27, 1999, Pierce/O'Neill signed an agreement to sell the Eller property to Knierin. This occurred between Eller's initial refusal on January 22nd to sign the sales agreement with Pierce/O'Neill and finally signing it on January 28th. The Commission's decision states Bartron did not not know of this sales contract until February 16, 1999 or mid-March 1999.
The Commission determined that Wayne Bartron, by his conduct, had violated three statutes regulating the conduct of brokers/realtors. The first is that he represented more than one party in a transaction without the consent of all. Second, it found he had agreed to receive compensation from Peirce/O'Neill, which he had solicited, while acting as Eller's agent. Third, the Commission held that Bartron engaged in conduct which was improper, fraudulent or dishonest. This, it said, violated 24 Del. C. § 2712(a)(12) which prohibits such conduct. The Commission said Bartron "put greed and personal gain ahead of the best interest of his client and, in so doing, acted improperly."
24 Del. C. § 2912(a)(4): Acting for more than 1 party in a transaction without the knowledge and written consent of all parties for whom the certificate holder acts.
24 Del. C. § 2912(a)(9): Receiving or making an arrangement or agreement to receive, directly or indirectly, any form of valuable consideration in exchange for the placement of, or favor in, any business transactions, or any business transaction or transactions incidental thereto, negotiated or handled by said broker, salesperson, or appraiser as agent unless, prior to the time of the placement of, or favor in, said business transaction, the broker, salesperson or appraiser shall have fully disclosed in writing to the parties to such business transaction for whom the broker, salesperson or appraiser is acting as agent the existence of such agreement or arrangement.
Commission decision, March 8, 2001, p. 8. Defendant RE/MAX, Bunch summary judgment motion, Exhibit D.
For all of these violations and the nature of his conduct, the Commission placed Wayne Bartron only on six months probation and fined him $1,500.
When Wayne Bartron became aware in 2000 of Eller's complaint to the Commission, he inquired of Bunch about insurance coverage. At that time the insured was RE/MAX Realty. But also around that time RE/MAX Realty was engaging in merger negotiations with RE/MAX of Wilmington ("ROW"). RE/MAX Realty's errors and omissions policy covered events from February 2, 1998 to February 2, 2001.
The Bartrons allege that Bunch said there would be coverage and that the merger would have no effect on that coverage. The question to her was prompted, they assert, by their consideration of "employment" at ROW because the acts in question occurred when working at RE/MAX Realty.
After oral argument on the RE/MAX Realty and Bunch summary judgment motion on the Bartrons' cross-claim that Bunch misrepresented that coverage existed, the Court determined further discovery was needed. That discovery has shown that RE/MAX Realty sent a notice of claim in early 2000, and it was received by the insurer, St. Paul Fire and Marine Insurance Company. The letter or notice is not in the record at the moment, but there is a record that the date of loss or the date of the claim report is February 2, 2000. It appears the notice of the claim went to one of the agencies working on behalf of St. Paul.
Attached to the Bunch and RE/MAX Realty summary judgment motion against the Bartrons' cross-claim is a letter from St. Paul dated October 12, 2005. It is addressed to Bunch and RE/MAX. St. Paul denied coverage because it says it received notice of the claim in August 2005. Since the reporting-of-claim period had expired, the letter continues, in February 2002, coverage was denied.
Docket #31, Exhibit F.
But the supplemental discovery undertaken after oral argument would indicate that St. Paul was timely notified in 2000 by RE/MAX Realty. The Bartrons indicate they are now following up.
Applicable Standard
This Court can only grant summary judgment where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. The Court must view the evidence in the light most favorable to the moving party. In order for a party to obtain summary judgment it must show there are no genuine issues of material and that it is entitled to judgment as a matter of law. The party opposing such motion is obligated to come forward with admissible, competent evidence showing the existence of a genuine issue of material fact.
Wilmington Trust Co. v. Aetna, 690 A.2d 914, 916 (Del. 1996).
State v. Regency Group, Inc., 598 A.2d 1123, 1126 (Del.Super. 1991).
Kysor v. Indus. Corp. v. Margaux, Inc., 674 A.2d 889, 894 (Del.Super. 1996).
Id.
Discussion A Statute of Limitations
Wayne and Lois Bartron have moved for summary judgment on all of the counts against them arguing that the Ellers' action is barred by the statute of limitations. Their contention is premised on a three year statute of limitations. They point out that: 1) Eller signed the sales contract for $96,000 on January 28, 1999, 2) she was immediately suspicious or upset by that price, and 3) this action was filed on March 22, 2002. The date of injury was, they contend, January 28, 1999 and that means the March 2002 action is barred.The Court concurs that the applicable statute of limitations is three years. Under Delaware Law, the statute of limitations begins to run at such time as the wrongful act occurred. Further, ignorance of a cause of action, in the absence of fraud or concealment, will not stop the statute of limitations from running.
David B. Lilly Co., Inc. v. Fisher, 18 F.3d 1112, 1117 (3rd Cir. 1994).
Isaacson, Stolper Co. v. Artisan's Sav. Bank, 330 A.2d 130, 132 (Del. 1974).
There are some key factual disputes which prevent an award of summary judgment. One is the Commission's finding that Wayne Bartron acted fraudulently. While one of the Ellers' claims against him is for fraudulent conduct founded on a Commission regulation, there is sufficient evidence at this juncture to support a common law claim of fraud. First, he was in negotiations with Brian Pierce to be compensated for some kind of role, akin to a listing agent, in the Pierce/O'Neill efforts to have a quick resale. The record, particularly the Commission decision, strongly suggests Wayne Bartron was negotiating for this compensation or had reached an agreement about it before or at the time he got Loretta Eller to sign the sales agreement. Yet, of course, he never told the Ellers of this and they did not find out until some time after they sold the house in March. Curiously, Bartron himself did not know of the Pierce/O'Neill sales contract with Knierim for several weeks after he got Loretta Eller to sign the sales contract.
The Commission's decision mentions two dates on which Bartron learned of the Pierce/O'Neill sales contract: mid-February and mid-March. There is nothing else in the record presented to the Court to clarify which date.
Common law fraud has these elements:
1. A false representation, usually one of fact, made by the defendant;
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.
Stephenson v. Capano Development, Inc., 462 A.2d 1069, 1074 (Del. 1983).
In addition, fraud can exist where there is deliberate concealment of facts and silence on the face of a positive duty to speak. Bartron, who was initially and foremost the Ellers' listing agent had such a duty. Common sense, with or without a regulation or a statute dictates that. The Real Estate Commission determined Bartron's conduct was fraudulent and that he had a duty to inform the Ellers of his dual role. These findings do not establish those matters as an ultimate fact in this case. A jury will have to decide if Bartron's conduct was fraudulent. It is undisputed, however, that he concealed from the Ellers his financial arrangement and role with Pierce/O'Neill.
Schmeusser v. Schmeusser, 559 A.2d 1294, 1295-96 (Del. 1989).
The upshot of all this is that the Court cannot say as a matter of law that the Ellers' injury was on January 29, 1999 or later. Bartron's conduct, if it were found in this litigation to be fraudulent, may have made their injury unknowable for several months or delayed the running of the statute of limitations. For these reasons, the Bartrons' summary judgment motion covering Counts I — V and VIII is DENIED.
B Claims Against Lois Bartron
Lois Bartron is a named defendant in Counts I, II, III, IV, V, and VIII. The basis for the Ellers' action against her is that her name appears in typed form on the standard, pre-printed listing agreement Loretta Eller signed in 1998. In addition, there were several conversations between Eller and Lois Bartron between that signing and Eller's signing of the sales agreement on January 28, 1999.
Lois Bartron has submitted an affidavit stating she was not present when the 1998 listing agreement was signed, and as the document itself shows, she was not a signatory to it. She avers she performed no services in connection with the listing agreement and was not involved in any of the negotiations. Her conversations with Eller, she has sworn, also did not involve any services.
Most importantly, her affidavit states she was not a party to any kind of disciplinary proceeding before the Real Estate Commission. The total record presented to the Court in all the motions substantiates that sworn statement. The only proceeding involved Wayne Bartron.
As stated earlier, when the moving party to a summary judgment motion properly supports it, the burden shifts to the non-moving party to demonstrate that there are genuine issues of material fact. The Ellers did not respond to Lois Bartron's motion. The Court's examination of the entire record presented to it shows there is no reasonable hypothesis upon which the Ellers can recover against Lois Bartron. Since the Ellers have not shown that there is a genuine issue of material fact and the Court's examination of the record reveals there is none, Lois Bartron's summary judgment motion is GRANTED on Counts I — V and VIII.
Howard v. Food Fair Stores New Castle, Inc., 201 A.2d 638, 640 (Del. 1964).
Compare Vanaman v. Milford Memorial Hospital, Inc., 272 A.2d 718, 720 (Del. 1970).
Pierce v. International Ins. Co. of Ill., 671 A.2d 1361, 1363 (Del. 1996).
C Claims Against Wayne Bartron Based on Violations of Real Estate Commission Rules
The Ellers' complaint contains several causes of action against Wayne Bartron premised on violations of several Real Estate Commission regulations (Counts IV and V) and violations of several statutory provisions regulating brokers/realtors (Count VIII). Wayne Bartron moves for summary judgment on these three counts asserting these provisions do not create a private cause of action. In Count IV, the Ellers' cause of action is founded on an alleged violation of Commission Regulation 10.1 in that he did not disclose his personal interest to them. In Count V, the allegation is liability resulting from violation of Commission Regulation 7.5.1 by his acceptance of compensation from more than one party in a transaction without the requisite disclosure to all parties.In Count VIII, the statutes the Ellers claim Wayne Bartron violated are 24 Del. C. § 2912(a)(4) and (9) which provide:
(4) Acting for more than 1 party in a transaction without the knowledge and written consent of all parties for whom the certificate holder acts.
* * * * *
(9) Receiving or making an arrangement or agreement to receive, directly or indirectly, any form of valuable consideration in exchange for the placement of, or favor in, any business transactions, or any business transaction or transactions incidental thereto, negotiated or handled by said broker, salesperson, or appraiser as agent unless, prior to the time of the placement of, or favor in, said business transaction, the broker, salesperson or appraiser shall have fully disclosed in writing to the parties to such business transaction for whom the broker, salesperson or appraiser is acting as agent the existence of such agreement or arrangement.
The Commission's decision, a copy of which was not included in Wayne Bartron's motion but in another party's separate motion, does not reflect a finding that he violated any Commission regulations governing brokers/realtors. The two regulations the Ellers claim were violated, however, appear to be identical to the two statutory provisions, 24 Del. C. § 2912(a)(4) and (9) cited in the Commissioner's decision.
Wayn e Barton, nevertheless, contends there is no private cause of action for a violation of either a Commission regulation or these statutes. He argues, correctly, that 24 Del. C. § 2912(a) gives the Real Estate Com mission power to investigate, on its initiative or upon a verified complaint, the conduct of any real estate broker or salesperson. Section 2912(a) specifies the kind of misconduct, which, if the person is found "guilty," he or she may be disciplined. The range of discipline is spelled out in 24 Del. C. § 2914. The Commission is empowered to promulgate regulations to govern broker/salesperson conduct.
Wayne Bartron also contends that for statutes and/or such regulations to create a private cause of action, they either must explicitly allow for it or that persons such as the Ellers are within the class of persons to be protected by the statute. Eller did not file a response to this motion for summary judgment, either.
Contrast to the Ellers' claim in Count III alleging a violation of the Consumer Fraud Act, 6 Del. C. § 2513, where by statute a private cause of action exists for a violation of that statute, 6 Del. C. § 2525.
It is well-settled Delaw are law that the violation of a statute enacted for the safety of others constitutes negligence in law or negligence per se. For there to be a cause of action, there must be a causal connection between the alleged injury and such a statutory violation. The party invoking a statute must be "a member of the class of persons for whose protection or benefit the statute was enacted.
Wright v. Moffitt, 437 A.2d 554, 557 (Del. 1981).
Wealth v. Renai, 114 A.2d 809, 811 (Del.Super. 1955).
Ford v. Ja-Sin, 420 A.2d 184, 186 (Del.Super. 1980).
Here, the Ellers contend, they have a private right of action as a member of the class to be protected. They base their claim on alleged violations of Real Estate Commission Regulations and two statutory provisions. The Court must look to see whether there is a violation of the Regulations and/or statutes, if there is a causal connection between that violation and the injury the Ellers allege they suffered, and whether they are members of the class of persons for whose protection or benefit the Regulations and statutes were enacted.
Legislative intent is the primary focus in a judicial inquiry about whether a statute creates an implied private right of action. When the statute or regulation in question does not expressly create a private remedy, it must be determined whether the requisite legislative intent is implicit in the text, structure or purpose of the code section or regulation. There is a question as to whether Chapter 29 was enacted for a designated class of individuals or to protect the public at large.
Parker v. Gadow, 893 A.2d 964, 967 (Del. 2006).
Brett v. Berkowitz, 706 A.2d 509, 512 (Del. 1998).
Id. at 513.
The relevant factors in determining whether a private right of action has been created are:
(1) whether the plaintiff is a part of a c lass of specific persons the statute was enacted to protect; (2) whether there is any evidence of legislative intent to grant or deny a private cause of action under the statute; and (3) whether the presence of a private cause of action is consistent with the purpose of the legislation.
Thomas v. Hartford Mutual Ins. Co., 2003 WL 220511 (Del.Super.), at *4.
This Court in Lock v. Schrepler held that the provisions in 24 Del. C. § 2912 did not create a basis for a private cause of action. Using the above three tests this Court found that: (1) the statute created no specific groups of persons to be protected giving, instead, the Commission the power to regulate and discipline to protect the public in general; (2) there was no explicit or implicit legislative intent to create a private cause of action; and (3) it would be inconsistent with legislature intent to find a basis for a private cause of action because the intent was to give regulatory power to the Commission. The Court in Lock noted, as to the last point, that to imply a cause of action in the statute would be "contrary to the clear language of the statute, where such a cause of action would at best duplicate an existing common law remedy . . .
426 A.2d 856 (Del.Super. 1981).
Lock, 426 A.2d at 864-67.
Id at 867.
Chapter 29 has been amended several times since Lock v. Schrepler. One amendment added this provision:
None of those amendments reversed the holding in Lock that § 2912 did not create a private cause of action. The General Assembly when enacting legislation is presumed to be aware of prior law, including judicial decisions. Schribner v. Chonofsky, 310 A.2d 924, 926 (Del. 1973). This Court, therefore, may properly infer that the absence of a post- Lock amendment creating a private cause of action means there remains no legislative intent to create one, if not an intent to uphold Lock's holding.
The primary objective of the Real Estate Commission, to which all other objectives and purposes are secondary, is to protect the general public, especially those persons who are direct recipients of services regulated by this chapter from unsafe practices, and from occupational practices which tend to reduce competition or fix the price of services rendered. The secondary objectives of the Commission are to maintain and establish minimum standards of licensee competency, and establish and maintain certain standards in the delivery of services to the public.
24 Del. C. § 2929. This provision was added in 1982 by 63 Del. Laws c. 463, sec 5. Defendants Bunch and RE/MAX Realty mistakenly argued it was added in 1987. Further, the "Revisor's note" in the Michie Delaware Code is totally wrong about § 2929. This section wasnot moved from § 2914 to § 2929 in 71 Del. Laws c. 103.
There have been several court decisions since the 1982 enactment of what is now § 2929. But none have held that provisions in Chapter 29 create a private cause of action.
See, e.g., Eastern Commercial Realty Corp, v Fusco, 654 A.2d 833 (Del. 1995).
Defendants Bunch and RE/MAX Realty have also moved for summary judgment on Counts V I and VII of the Ellers' complaint which seeks recovery as a result of violating Commission Regulations. The Bartrons are not named defendants in Count VII. That Count alleges a violation of Commission regulation 1.3.2 for failing to provide adequate supervision of their office. The same reasoning that the Ellers do not have a private cause of action against Wayne Bartron under a Commission regulation, applies with equal force to their claims in Counts VI and VII against Bunch and RE/MAX Realty.
Curiosly, their motion does address Count VIII which invokes two statutory sections against them.
Whether grounded on a violation of a Commission regulation or any of the provisions in § 2912, the Ellers do not have a private cause arising out of them against any of the defendants.
Judicial efficiency dictates that, despite no motion from Bunch and RE/MAX as to Count VIII, this ruling covers that Count, too.
Actions Against the Bartrons Based on the Fraud Act
In Count III of their complaint, the Ellers seek recovery from the Bartrons for an alleged violation of 6 Del. C. § 2513(a):
(a) The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, or the concealment, suppression, or omission of any material fact with intent that the others rely upon such concealment, suppression or omission, in connection with the sale, lease or advertisement of any merchandise, whether or not any person has in fact been misled, deceived or damaged thereby, is an unlawful practice. It shall also be an unlawful practice to misrepresent the geographic location of a business or supplier which raises or sells flowers and/or ornamental plants.
The Court has already held that the Ellers have not produced any evidence of any violation by Lois Bartron or made the necessary showing to demonstrate there is a genuine issue of material fact as to Lois Bartron. Title 6 § 2525, however, unlike the Code sections regulating realtors in Title 24, does provide for a private cause of action for the violation of that section. Wayne Bartron has not moved for summary judgment on Count III.
Agent or Independent Contractor
Defendants Bunch and RE/MAX Realty seek summary judgment on all of the Ellers' claims against them, which is all counts. The Ellers' claims against these two defendants, except for Count VI, is based on vicarious liability arising from Wayne Bartron. Bunch and RE/MAX Realty contend that the Bartrons were not in a master/servant relationship with them but were non-agent-independent contractors. If so, therefore, there can be no vicarious liability on their part for the actions of Wayne Bartron.
The Ellers did respond to this motion.
Now moot for Lois Bartron, supra p. 10-11.
In support of their motion, the defendants submitted an affidavit from Bunch. She states that the Bartrons "were independent contractors and not employees." Further she states:
1. The Bartrons were not treated as employees for federal tax purposes.
2. They received 100% of their commissions, except for the contributed fixed percentage for office overhead and all personal expenses incurred.
3. The Bartrons did have to work a specified number of hours and required to attend sales meetings.
4. The Bartrons retained sole discretion in carrying out their soliciting and selling activities.
5. The Bartrons were responsible for personal expenses, such as car travel, food, lodging, vehicle insurance, etc.
6. The Bartrons paid for the advertising for their own listings, but they paid RE/MAX Realty for their share of the office expenses, advertising, Board of Realtors, etc.
Bunch affidavit, paragraph 3.
The Ellers' reply is devoid of reference to exhibits or testimony or any affidavits. Instead, they rely upon the doctrine of apparent authority citing Singleton v. Int'l Diary Queen, Inc. This Court based on the meager, at best, record the Ellers have provided cannot say whether this doctrine applies. There is not even an affidavit from the Ellers to attempt to show a genuine issue of material fact.
332 A.2d 160 (Del.Super. 1975).
But when considering a summary judgment motion, the Court is required to examine the entire record. Ironically the Bartrons' summary judgment motion based on the statute of limitations includes several documents which present some competent evidence. One is the original listing agreement which has this line: "TO Wayne Lois Bartron RE/MAX Realty, Ltd. (BROKER)." The listing agreement provides that the Ellers will "pay Broker" a 7% commission. There is another paragraph that, "All advertising deemed necessary by Broker . . ." Paragraph 8 refers to "Broker" when authorizing multi-listing placement. Broker is authorized to place a "For Sale" sign on the property and "Broker" is authorized to show the property. Other paragraphs in the listing agreement refer to "Broker."
Oliver B. Cannon Sons, Inc. v. Dorr-Oliver, Inc., 312 A.2d 322, 325 (Del.Super. 1973).
Bartron's summary judgment motion, docket #26, Exhibit A.
Id., p. 7.
The key point with the listing agreement for purposes of this m otion is that Broker includes RE/MAX Realty. And there is another document attached to the same summary judgment motion from the Bartrons. It is Exhibit D, which is the sales contract. At the bottom, RE/MAX Realty is listed as the "Listing Broker" with its "Code" number and telephone number. Wayne Bartron is listed as the "Listing Associate" and his "Code" number is given.
The quintessential case to assist with the Bunch-RE/MAX Realty motion is Fisher v. Townsends, Inc. The Supreme Court laid down a two-step process for determining whether a person is a servant or an independent contractor. But even a determination that the person is an independent contractor does not resolve the issue of potential vicarious liability. That is because an independent contractor can still be an agent which implicates vicarious liability.
695 A.2d 53 (Del. 1997).
In the first part of the analysis — servant or independent contractor — there is a fact specific but non-exclusive list of characteristics employed to help answer the question as to which role the direct tortfeasor fits:
(a) the extent of control, which, by the agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is a part of the regular business of the employer;
(I) whether or not the parties believe they are creating the relation of master and servant; and
(j) whether the principal is or is not in business.
Fisher, 695 A.2d at 59, quoting RESTATEMENT (SECOND) OF AGENCY § 220.
And the determination of this issue is usually left to the jury. There are some additional considerations. First, the contract between the parties, such as the agreement between Wayne Bartron and RE /MAX Realty is not necessarily determinative of the servant/agent issue. Actions taken by these parties are another consideration. The problem the Court has is that, in the end, the record is incomplete and both sides to this motion rely more on assertions than evidence.
Id. at 60.
Which is not in the record.
Loden v. Getty Oil Co., 316 A.2d 214, 217 (Del.Super. 1974); aff'd sub. non.326 A.2d 888 (Del. 1974).
There is a strong enough suggestion at this juncture, however, to prompt the Court to say a more thorough inquiry into the facts is needed to clarify the application of the law.
Tew v. Sun Oil Co., 407 A.2d 240, 242 (Del.Super. 1979).
The state of the record at this point makes it impossible to rule on the servant/independent contractor issue. In turn, it is impossible to rule now on the second part of the test in Fisher. That is, even if the initial determination is that an individual were an "independent contractor," that person could be an independent contractor agent. If so, vicario us liability attaches. Th is, too, is a fac t driven question. And here again, even assuming Wayne Bartron were found to be an independent contractor, certain factual scenarios could make him an independent contractor agent. But, as before, the record is insufficiently developed for this issue to be resolved.
For these reasons, the Bunch/RE MAX Realty summary judgment motion on the issue of vicarious liability is DENIED . That covers C ounts I — V and VII — VIII.
Personal Liability of Bunch
Defendant Bunch has moved separately for summ ary judgment on the Ellers' claims, arguing she cannot be held personally responsible. She is or was the sole stockholder of RE/MAX Realty, Ltd. Normally, a stockholder is not personally liable for the kind of claims the Ellers make. Their only response, again only as an assertion without reference to anything in the record, is that she was the broker of record. T hey cite no legal authority for their argument, even if that assertion were a matter of competent evidence. Nor has the Court's independent examination of the existing records revealed anything to support the Ellers' position.
Scott Douglas Corp. v. Greyhound Corp., 304 A.2d 309, 314 (Del.Super. 1973).
For these reasons, defendant Bunch's summary judgment as to any persona l liability is GRANTED.
Bartron's Cross-claim Against Bunch, RE/MAX, Jim Pettit Regarding Insurance Coverage
The Bartrons cross-claimed against Bunch, RE/MAX Realty, RE/MAX of Wilmington and Jim Pettit asserting they were told there would be insurance coverage for them for their activities which were, at the time, the subject matter of the Commission complaint and the Ellers' action. They contend there was or is no such coverage in fact.
The issue arises because the activities in question occurred while they were at RE/MAX Realty which later became a separate new corporation, RE/MAX of Wilmington ("ROW"). The Bartrons also allege that they were aware of the proposed merger with ROW, were considering employment with ROW, and were concerned with coverage because that was a new entity and not the one where they worked w hen all this took place, but still wanted to be assured coverage existed. The Bartron's claim that they wanted to be sure "tail" or "gap" insurance was in place during and after the corporate change. In addition to Bunch's alleged assurances, they contend Pettit gave a similar assurance.
The Bartrons alleged originally that when they made a claim under RE/MAX Realty's errors and omissions policy, they were told there was no coverage. When seeking or inquiring about possible ROW insurance coverage, they say, they were told it was not available either. They further allege that Bunch and Pettit knew there would be no coverage but did not inform them, the Bartrons. If they had been informed there was no coverage, they claim they would have sought their own. Bunch's and Pettit's misrepresentations damaged them, they contend.
Pettit and ROW were awarded summary judgment on the Bartron's insurance claims.
Docket #26, Brady, J. Subsequently they filed an action, Bartron v. Pettit, C.A. No. 06C-05-268, which has also been assigned to this Judge. The Bartrons have moved to consolidate that new case with this case. Pettit and ROW oppose it. The decision on that motion appears in a separate opinion as the date of this one.
The additional discovery undertaken after oral argument has both clarified certain issues and muddied others.
A deposition was taken of M ary Nell Lockard. She is the manager of the underwriting department of John P. Pearl Associates. During the times relevant to the coverage issues in this case, Pearl was the managing agent for St. Paul Insurance Company which was the errors and omissions carrier. It had the authority to receive insurance applications, issue policies, etc., but it did not have the authority to pay, adjust or deny claims. Any claim it received would have been forwarded to Associated Claims Enterprise. Lockard testified that a claim was made to St. Paul and/or ACE on February 2, 2000 or that this date was the date of loss. This was at a time when the St. Paul E and O policy covering RE/MAX Realty was in effect. The Bartrons' cross against Bunch and RE/MAX Realty is premised on the 2005 denial of coverage which was based on an apparen tly erroneous belief by St. Paul that it had not received timely notice of the c l ai m . The supplemental discovery appears to indicate there was timely notice. It may be that there was, and is, after all coverage just as Bunch is alleged to have represented. If so, there can be no fraudulent misrepresentation and that cause of action might disappear.
Bunch, RE/MAX summary judgment motion on Bartrons' fraud claim, docket # 31, Exhibit F.
But to muddy the waters, the additional discovery would seem to reveal that, even with a policy in place and timely notice of a claim, there could be no coverage for dishonest or fraudulent conduct.
Bunch, RE/MAX summary judgment motion, docket #31, Exhibit B.
This turn of events raises two new issues. The first is that the Bartrons' supplemental briefing (post-added discovery) reports they have repeatedly attempted to follow-up with St. Paul based on what Lockard said. To date, they report, there has been no response from St. Paul. Nor has the Court been notified since their last brief that subsequent attempts have been successful. To a large measure, therefore, the Bartrons' issue may be with St. Paul not Bunch/RE/M AX. However, if St. Paul agrees a timely notice of claim was filed, it may deny coverage on the grounds of dishonest or fraudulent conduct.
The Bartrons do not leave it there, however. They cast a new net over Bunch/RE/MAX. It is that they did not perform the necessary follow-through with St. Paul to make sure there was coverage. After all, they argue correctly, RE/MAX was the insured and not they. While, therefore, any fraud claim could be obviated by the expanded record, the Bartrons may have some other kind of claim against Bunch/RE/MAX on the coverage issue. That claim, of course, could be obviated in whole or in part by whatever action (or inaction) St. Paul undertakes on this matter. But if St. Paul denies coverage based on the fraud issue, the Bartrons arguably have a cause of action against Bunch/RE MAX for not pursuing the coverage question and telling them St. Paul would not cover based on the dishonesty exclusion. And yet they may not have a claim if they could not get coverage because of fraudulent conduct.
The Bartrons will have until December 7, 20 07, to move to amend their cross-claim against Bunch, RE/MAX, if they so choose.
Conclusion
For the reasons stated herein, the Court resolves the various motions as follows:
1. The Bartrons' summary judgment motion against the Ellers' claims on the ground of a statute of limitations bar is DENIED.
2. Lois Bartron's summ ary judgment motion that she should not be a party defendant to the Ellers' action is GRANTED.
3. Defend ants Bunch and RE/M AX R ealty's summary judgment motion against the Bartrons (now just defendant Wayne Bartron) on the grounds they were independent contractors, and they are not vicariously liable is DENIED.
4. Defendants Bartrons', Bunch's, and RE/MAX Realty's summary judgment motion on the Ellers' claim that Real Estate Commission regulations and/or applicable statutes do not create a private cause of actions is GRANTED.
5. Defendant Bunch's summary judgment motion that as a stockholder in RE/MAX Realty she has no personal liability is GRANTED.
6. Defendants Bunch and RE/MAX Realty's summary judgment motion against the Bartrons on their cross-claim involving insurance coverage is DENIED. However, Wayne Bartron has until December 6, 2007 to move to amend his cross-claim in accordance with the Court's decision if he chooses.IT IS SO ORDERED.