Opinion
Civil Action No: 99A-02-005.
Date Submitted: February 7, 2000.
Date of Decision: July 11, 2000.
William M. Chasanov, Esquire, Brown Shiels Chasanov, 10 East Pine Street, P.O. Box 742, Georgetown, DE 19947, attorney for Defendant Below-Appellant;
William E. Wright, Esquire, 1632 Savannah Road, #4, P.O. Box 215, Lewes, Delaware 19958, attorney for Plaintiff Below-Appellee.
MEMORANDUM OPINION
INTRODUCTION
This is the Court's decision on Appellant Alfred Gardiner's appeal of the Court of Common Pleas' judgment for $3,135.20 against him and in favor of Appellee Delaware Home Health Care, Inc. For the reasons set forth below, the Court of Common Pleas' judgment is affirmed.
FACTS
Appellant Alfred Gardiner ("Al Gardiner") and Appellee Delaware Home Health Care, Inc. ("Home Health") entered into a Rental/Purchase Service Agreement (the "Agreement") for the month-to-month rental of a "BIPAP" machine on May 29, 1997. Al Gardiner used the BIPAP machine to treat his sleep apnea. Al Gardiner's wife, Gail Gardiner, was listed on the Agreement as the person to receive messages for him. Al Gardiner lived in Milford, Delaware when he signed the Agreement. Home Health delivered the BIPAP machine from its Milford, Delaware store to Al Gardiner.
Al Gardiner's insurance company terminated his insurance coverage on January 1, 1998. Al Gardiner did not inform Home Health of this, even though he was required to do so pursuant to paragraph 11(b) of the Agreement. Al Gardiner moved to Fort Washington, Maryland, taking the BIPAP machine with him sometime prior to March 4, 1998. Al Gardiner did not inform Home Health of this, even though he was also required to do so pursuant to paragraph 11(a) of the Agreement.
Paragraph 11 of the Agreement states:
"11. It is your responsibility or the responsibility of your agent to notify Supplier of the following:
(a) Any change of your address or location of use of the Equipment; (b) Any change in your insurance coverage; (c) Any change in the identity of your attending physician; (d) If there is no longer a medical need for the Equipment because of your recovery, institutionalization or other reason, including death; (e) Any other event which materially affects your use of need of the Equipment of your ability to meet your payment obligation."
Id.
It is not clear from the record below what prompted it, but Home Health tried to contact Al Gardiner from March 4, 1998 to March 20, 1998 to verify his insurance coverage, get his new address, determine whether he wanted to pay for the BIPAP machine himself, and arrange for the recovery of the BIPAIP machine. Home Health never spoke directly to Al Gardiner. Instead, Home Health spoke to Gail Gardiner, as it was authorized to do under the Agreement.
Home Health left phone messages for Al Gardiner at his office and home on March 4, 1998. Al Gardiner did not return these messages. Home Health, which did not yet know that Al Gardiner's insurance coverage had been terminated, then contacted Al Gardiner's insurance company to verify his coverage, but was not able to get an answer. Home Health did reach Gail Gardiner later that day to tell her that the status of Gardiner' s insurance coverage needed to be resolved, and that Home Health needed to get the BIPAP machine. At the time, Home Health had a phone number for Al Gardiner, but no residential address. Gail Gardiner promised to call back the next day. Home Health also tried to get an address for Al Gardiner by calling "information" in Maryland, but was not able to get an address.
When Gail Gardiner did not call back as promised the next day, May 5, 1998, Home Health called her. Gail Gardiner gave her new residential address and insurance information to Home Health. Home Health told Gail Gardiner that Al Gardiner would be responsible for the rental payments on the BIPAP machine if his insurance did not cover them. Home Health called Gail Gardiner later that day and asked her if she could bring the BIPAP machine to work. Gail Gardiner, after talking to Al Gardiner, said that Al Gardiner would deliver the BIPAP machine to Home Health's Millsboro, Delaware store on Monday, March 10, 1998.
Al Gardiner did not deliver the BIPAP machine to Home Health on Monday, March 10, 1998. The same day, Home Health learned that Gardiner's insurance coverage had been terminated on January 1, 1998. Upon learning this, Home Health tried to reach Gail Gardiner, but was unable to do so. The next day, March 11, 1998, Home Health called Gail Gardiner and told her that Al Gardiner's insurance coverage had been terminated. Home Health also told her that Al Gardiner had not dropped off the BIPAP machine as he had promised to do, and that the BIPAP machine needed to be returned. Gail Gardiner said that she would check on it and call Home Health back.
Nearly a week later, on March 16, 1998, after neither Gail or Alfred Gardiner had called back, Home Health again called Gail Gardiner. Gail Gardiner placed Home Health on hold and had another person take a message. Home Health left the message that it was very important for Gail Gardiner to call back. After not hearing back from either Al or Gail Gardiner for several days, Home Health called Gail Gardiner on March 20, 1998. Gail Gardiner told Home Heath that Al Gardiner was out of town and that he had taken the BIPAP machine with him. Home Health told Gail Gardiner that the outstanding balance needed to be paid and that the BIPAP machine had to be returned. Home Health also told Gail Gardiner that the BIPAP machine should not be taken out of Delaware and that Al Gardiner could have dropped the BIPAP machine off at any of Home Health's locations in Delaware.
Home Health made no other effort to get the BIPAP machine and Al Gardiner made no effort to either contact Home Health or return the BIPAP machine to Home Health. However, Home Health did continue to send monthly statements to Al Gardiner in Fort Washington, Maryland. Al Gardiner finally returned, via United Parcel Service, the BIPAP machine to Home Health on January 5, 1999. Home Health filed suit against Al Gardiner for the unpaid rental payments until the BIPAP machine was returned.
DECISION BELOW
The issue at the trial in the Court of Common Pleas was whether or not Al Gardiner owed $3,135.20 to Home Health for the unpaid rental payments for the BIPAP machine up to the time that he returned it to Home Health. Home Health argued that he did, reasoning that it had tried to get the BIPAP machine back, but had been unable to do so because Al Gardiner would not cooperate. Al Gardiner argued that he did not, reasoning that his only obligation was to not deny Home Health access to the BIPAP machine. The Court of Common Pleas ruled that there was an implied covenant of good faith in the Agreement, requiring Al Gardiner to cooperate with Home Health in the return of the BIPAP machine, and that Al Gardiner breached this covenant by not cooperating with Home Health. The Court of Common Pleas entered a $3,135.20 judgment in favor of Home Health and against Al Gardiner.
STANDARD OF REVIEW
The Superior Court reviews appeals from the Court of Common Pleas on the record. In this Court's review of the record, it is limited to correcting errors of law and determining whether the factual findings of the trial judge are supported by substantial evidence. Questions of legal error are reviewed de novo on appeal. Findings of fact, however, will not be disturbed unless they are not "adequately supported by the record" and the trial court's reasoning is not "the product of an orderly and logical deductive process." Substantial evidence on the record is such relevant evidence that a reasonable mind might accept to support a proposition. It is more than a scintilla of evidence, but less than a preponderance. This Court does not invade upon the province of the trial court by weighing evidence, determining credibility or making findings of fact.
10 Del. C., § 1326(c) and Superior Court Civil Rule 72(g).
Shahan v. Landing, Del. Supr., 643 A.2d 1357 (1994).
Zirn v. VLI Corp., Del. Supr., 681 A.2d 392 (1996).
Wyatt v. Motorola. Inc., Del. Super., C.A. No. 93A-01-004, Gebelein, J. (March 11, 1994) (Mem. Op.)
Oceanport Ind. v. Wilmington Stevedores, Del. Supr., 636 A.2d 892 (1994).
Onlev v. Cooch, Del. Supr., 425 A.2d 610 (1981).
Johnson v. Chrysler, Del. Supr., 213 A.2d 64 (1965).
ISSUES PRESENTED AND SUMMARY OF ARGUMENTS
Al Gardiner argues that the Court of Common Pleas erred in its interpretation of the Agreement. The Court of Common Pleas, he asserts, inappropriately applied an implied covenant of good faith and fair dealing to a situation controlled by the plain language of the Agreement. In the alternative, Al Gardiner argues that, even should he be held responsible under the Agreement, the amount of damages awarded by the Court of Common Pleas was excessive because Home Health should have mitigated its damages by picking up the BIPAP machine earlier.Home Health argues that the Court of Common Pleas committed no error of law and that its factual findings are supported by the evidence. As to the issue of mitigation of damages, Home Health argues that this issue should be precluded since it was not raised as an issue below. In the alternative, should this Court consider it, Home Health argues that its attempts to locate the BIPAP machine and arrange for its return demonstrate a good faith effort to mitigate its damages.
I. IMPLIED COVENANT OF GOOD FAITH
Interpretation of a contract is a matter of law and is therefore reviewed do novo by this Court. Al Gardiner argues that Paragraph 3 of the Agreement is controlling and that the Court of Common Pleas was in error to apply the good faith covenant. Paragraph 3 of the Agreement provides, in part, that Home Health may, upon the failure of payment, enter the premises and recover the BIPAP machine. An implied covenant of good faith and fair dealing is engrafted upon every contract. This obligation requires a party in a contractual relationship to refrain from arbitrary or unreasonable conduct which has the effect of preventing the other party from receiving the fruits of the contract. Al Gardiner is correct in his assertion that an implied covenant of good faith is not to be examined by a court where the literal terms of the contract are adequate. Since a covenant of good faith is a supplementary term, and not to be used by a Court to rewrite or supply provisions to an agreement, it is a cautious undertaking. Where, however, the parties have failed to negotiate as to a particular matter, and an act later complained of would have expressly been proscribed if the parties had they thought to negotiate on that issue, a covenant of good faith and cooperation may properly be implied by the Court. Id.
Cincinnati SMSA Ltd. v. Cincinnati Bell, Del. Supr., 708 A.2d 989 (1998).
Paragraph 3 of the Agreement states:
"3. At all times during which you rent the Equipment listed on the contract, title to the Equipment shall remain with Supplier. If at any time, you, Medicare, Medicaid, your private insurance company or any other third party payor fails to pay the monthly rental amount. Supplier may retake possession of the Equipment unless you agree to pay for it. You agree under those circumstances you will either make the rental payments or you will permit Supplier to enter the premises and remove the Equipment."
Wilgus v. Salt Pond Investment Co., Del. Ch., 498 A.2d 151, 159 (1985).
Id.
Gilbert v. El Paso Co., Del. Supr., 575 A.2d 1131 (1990).
Cincinnati SMSA, supra, at 992.
It is clear to this Court, based on the facts before it, that Home Health's right to enter Al Gardiner's premises and remove the BIPAP machine, as set forth in paragraph 3 of the Agreement, is meaningless unless the Court implies a covenant requiring Al Gardiner to cooperate in the return of the BIPAP machine. Al Gardiner lived in Milford, Delaware when he and Home Health entered into the Agreement. When Al Gardiner's insurance expired and Home Health expressed its desire to recover the BIPAP machine, he had moved to Fort Washington, Maryland, taking the BIPAP machine with him. Given the nature of the BIPAP machine, and the fact that Al Gardiner was using it either inside his home or away from his home on business trips, it is obvious that it would have been impractical for Home Health to go to Al Gardiner's home in Fort Washington, Maryland to pick up the BIPAP machine without first receiving some assurance from Al Gardiner that the BIPAP machine would be present and that Home Health would have access to it. Just as Al Gardiner made it possible for Home Health to deliver the BIPAP machine to his home in the first place, he would have to make it possible for Home Health to pick it up when it was time to do so. Home Health went to great lengths to try to locate Al Gardiner and contact him to arrange the return of the BIPAP machine. Al Gardiner never called Home Health back, and he never told Home Health that the BIPAP machine was available for pick-up at any particular place and time. Instead, Al Gardiner remained silent and continued to use the BIPAP machine at home and on business trips.
Under these conditions, Al Gardiner's cooperation was necessary in order for Home Health to recover the BIPAP machine. This is clearly an understanding or expectation that is so basic to the Agreement that the parties felt it was unnecessary to negotiate as to this issue. While Al Gardiner claimed at trial that the BIPAP machine was available at any time for Home Health to pick up, the Court of Common Pleas specifically found otherwise. It determined that Al Gardiner had taken the BIPAP machine on the business trips with him after Home Health had begun its attempts to recover it and that he was using the BIPAP machine without paying for it. These actions, along with the efforts on the part of Al and Gail Gardiner to avoid Home Health's phone calls as reflected on the record, constitute a breach of the implied covenant of good faith, just as the Court of Common Pleas determined in its opinion.
Katz v. Oak Industries. Inc., Del. Ch., 508 A.2d 873 (1986),quoting, Corbin on Contracts (Kaufman Supp. 1984), § 570.
Merrill v. Crothall-American. Inc., Del. Supr., 606 A.2d 96 (1992) (conduct must reflect some aspect of fraud, deceit, or misrepresentation to call implied covenant into play).
II. MITIGATION OF DAMAGES
It is established Delaware law that an issue not litigated during trial in the Court of Common Pleas typically may not be subsequently raised on appeal to the Superior Court. The Superior Court may, in its discretion, exhibit some leniency toward a pro se litigant when the interests ofjustice so require. Where issues lay beneath the surface of matters raised below, but do not percolate to the top due to the pro se status of the litigants, they properly may be considered by the appellate court. However, where the record below is completely devoid of any inkling that the issue was brought before the trial court, whether plainly or in disguise, the general rule is applicable despite the existence of a pro se party.After a thorough review of the testimony and evidence before the Court, it is apparent that mitigation of damages was not even a phantom issue presented at trial. In fact, with the exception of the introduction of the invoices into evidence to prove the amount owed, there was no mention of damages at all throughout the thirty-three-page transcript. Therefore, it would be improper for this Court to examine this issue for the first time.
CONCLUSION
In light of the foregoing, the Court of Common Pleas' judgment is affirmed.