IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
SHANNON C. DIEHL- ) GUERRERO, ) ) Plaintiff, ) ) v. ) C.A. No. N16C-08-041 CLS ) HARDY BOYS ) CONSTRUCTION, LLC., ) RELIABLE HOME ) INSPECTION SERVICES, RHIS, ) INC., and WELLS FARGO ) HOME MORTGAGE, INC., ) ) Defendants. ) ) ) ) Date Submitted: March 17, 2017 Date Decided: March 27, 2017
On Plaintiff’s Application for Certification of Interlocutory Appeal Pursuant to Supreme Court Rule 42. DENIED.
ORDER
Gary W. Alderson, Esquire, Elzufon Austin Tarlov & Mondell, Wilmington, Delaware, Attorney for Plaintiff.
Kathleen A. Murphy, Esquire, Buchanan Ingersoll & Rooney, Wilmington, Delaware, Attorney for Defendant Wells Fargo Home Mortgage Inc.
SCOTT, J. Background
On February 28, 2017 this Court entered an Order granting Defendant Wells
Fargo Home Mortgage’s (hereinafter “Wells Fargo”) Motion to Dismiss. The
Court’s ruling was based on the Plaintiff’s failure to state a claim for which relief
can be granted under a negligence theory against Wells Fargo. Plaintiff filed an
Application for Certification of an Interlocutory Appeal with the Court on March
9, 2017, and Wells Fargo filed a Response on March 17, 2017.
Parties’ Contentions
Plaintiff contends that an Interlocutory Appeal is appropriate because this
Court “incorrectly interpreted Delaware law” by relying on Keith v. Sioris for
conclusion that, as a matter of law, a fiduciary duty does not exist between a
creditor and a debtor. Plaintiff claims that Keith v. Sioris is merely dicta and does
not support a finding that a fiduciary duty does not exist. Further, Plaintiff argues
that the Court disregarded Plaintiff’s argument that no Delaware case is on point as
to whether a mortgagee/mortgagor relationship gives rise to the existence of a duty.
Finally, Plaintiff also claims that the Court erred as matter of law when it made
factual determinations on an incomplete record. On the other hand, Wells Fargo
asserts that Plaintiff’s Application should be denied because it fails to meet the
criteria set forth in Supreme Court Rule 42(b) because the February 28 Order does
not decide a substantial issue of material importance that merits appellate review before final judgment. Wells Fargo argues that Plaintiff’s Application is
“essentially a motion for reargument characterized as an application for an
interlocutory appeal,” and Plaintiff missed the point of the Court’s February 28
ruling on Wells Fargo’s Motion to Dismiss.
Discussion
Delaware Supreme Court Rule 42 sets forth the criteria for certifying an
interlocutory appeal.1 The rule states that “[n]o interlocutory appeal will be
certified by the trial court or accepted by this Court unless the order of the trial
court decides a substantial issue of material importance that merits appellate
review before a final judgment.”2 Further, “[i]nterlocutory appeals should be
exceptional, not routine, because they disrupt the normal procession of litigation,
cause delay, and can threaten to exhaust scarce party and judicial resource.”3 The
trial court considers the following factors when deciding whether to certify an
interlocutory appeal:
(A) The interlocutory order involves a question of law resolved for the first time in this State; (B) The decisions of the trial courts are conflicting upon the question of law; (C) The question of law relates to the constitutionality, construction, or application of a statute of this State, which has not been, but should be, settled by this Court in advance of an appeal from a final order;
1 See Supr. Ct. R. 42. 2 Supr. Ct. R. 42 (b)(i). 3 Supr. Ct. R. 42 (b)(ii). (D) The interlocutory order has sustained the controverted jurisdiction of the trial court; (E) The interlocutory order has reversed or set aside a prior decision of the trial court, a jury, or a administrative agency from which an appeal was taken to the trial court which has decided a significant issue and a review of the interlocutory order may terminate the litigation, substantially reduce further litigation, or otherwise serve considerations of justice; (F) The interlocutory order has vacated or opened a judgment of the trial court; (G) Review of the interlocutory order may terminate the litigation; or (H) Review of the interlocutory order may serve considerations of justice.4
Only after the trial court considers the above factors “and its own assessment of the
most efficient and just schedule to resolve the case, the trial court should identify
whether and why the likely benefits of the interlocutory review outweigh the
probable costs, such that interlocutory review is in the interests of justice. If the
balance is uncertain, the trial court should refuse to certify the interlocutory
appeal.”5
This Court determines that Plaintiff’s Application should be denied. First,
the Court notes that Plaintiff’s Application is not based on arguments pursuant to
Delaware Supreme Court Rule 42. Rather, the Application argues that the Court
erred as a matter of law, and the Application is void of an analysis on any of the
factors listed under Rule 42(b). Plaintiff’s only argument pursuant to Rule 42 is
4 Supr. Ct. R. 42 (b)(iii). 5 Id. that the issue before the Court is a substantial issue of material importance in this
case, which merits appellate review before a final judgment. Although Plaintiff
failed to address any of the criteria under Rule 42, the Court finds, after its
independent consideration of the factors, that Plaintiff’s Application should be
denied. The Court finds that none of the factors listed in Rule 42 (b)(iii) apply to
the present case. Regarding the first factor listed in Rule 42, Plaintiff’s
Application does not involve a question of law resolved for the first time in this
State. This Application stemmed from Wells Fargo’s Motion to Dismiss. The
Court determined that Plaintiff failed to plead that Wells Fargo owed Plaintiff a
duty under a negligence theory. As the Court stated in the February 28 Order, duty
is determined by the Court because it is “entirely a question of law, to be
determined by reference to the body of statutes, rules, principles and precedents
which make up the law.”6 On a Motion to Dismiss the Court determines whether a
plaintiff may recover under any reasonably conceivable set of circumstances
susceptible of proof under the complaint.7 In making its determination, the Court
must accept all well-pleaded allegations in the complaint as true and draw all
6 Pipher v. Parsell, 930 A.2d 890, 892 (Del. 2007)(citing Fritz v. Yeager, 790 A.2d 469, 471 (Del. 2002). 7 Spence v. Funk, 396 A.2d 967, 968 (Del. 1978); see Cambium Ltd. v. Trilantic Capital Partners III L.P., 2012 WL 172844, at *1 (Del. Jan. 20, 2012) (citing Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, 27 A.3d 531, 537 (Del. 2011)). reasonable factual inferences in favor of the non-moving party.8 The Court agreed
with Wells Fargo, and held that the Plaintiff did not plead any facts that Wells
Fargo was involved in the selection of Mr. Kerrigan. The Complaint contained no
allegations, beyond Plaintiff’s assertion, that Wells Fargo owed Plaintiff a duty
regarding the selection of Mr.
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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
SHANNON C. DIEHL- ) GUERRERO, ) ) Plaintiff, ) ) v. ) C.A. No. N16C-08-041 CLS ) HARDY BOYS ) CONSTRUCTION, LLC., ) RELIABLE HOME ) INSPECTION SERVICES, RHIS, ) INC., and WELLS FARGO ) HOME MORTGAGE, INC., ) ) Defendants. ) ) ) ) Date Submitted: March 17, 2017 Date Decided: March 27, 2017
On Plaintiff’s Application for Certification of Interlocutory Appeal Pursuant to Supreme Court Rule 42. DENIED.
ORDER
Gary W. Alderson, Esquire, Elzufon Austin Tarlov & Mondell, Wilmington, Delaware, Attorney for Plaintiff.
Kathleen A. Murphy, Esquire, Buchanan Ingersoll & Rooney, Wilmington, Delaware, Attorney for Defendant Wells Fargo Home Mortgage Inc.
SCOTT, J. Background
On February 28, 2017 this Court entered an Order granting Defendant Wells
Fargo Home Mortgage’s (hereinafter “Wells Fargo”) Motion to Dismiss. The
Court’s ruling was based on the Plaintiff’s failure to state a claim for which relief
can be granted under a negligence theory against Wells Fargo. Plaintiff filed an
Application for Certification of an Interlocutory Appeal with the Court on March
9, 2017, and Wells Fargo filed a Response on March 17, 2017.
Parties’ Contentions
Plaintiff contends that an Interlocutory Appeal is appropriate because this
Court “incorrectly interpreted Delaware law” by relying on Keith v. Sioris for
conclusion that, as a matter of law, a fiduciary duty does not exist between a
creditor and a debtor. Plaintiff claims that Keith v. Sioris is merely dicta and does
not support a finding that a fiduciary duty does not exist. Further, Plaintiff argues
that the Court disregarded Plaintiff’s argument that no Delaware case is on point as
to whether a mortgagee/mortgagor relationship gives rise to the existence of a duty.
Finally, Plaintiff also claims that the Court erred as matter of law when it made
factual determinations on an incomplete record. On the other hand, Wells Fargo
asserts that Plaintiff’s Application should be denied because it fails to meet the
criteria set forth in Supreme Court Rule 42(b) because the February 28 Order does
not decide a substantial issue of material importance that merits appellate review before final judgment. Wells Fargo argues that Plaintiff’s Application is
“essentially a motion for reargument characterized as an application for an
interlocutory appeal,” and Plaintiff missed the point of the Court’s February 28
ruling on Wells Fargo’s Motion to Dismiss.
Discussion
Delaware Supreme Court Rule 42 sets forth the criteria for certifying an
interlocutory appeal.1 The rule states that “[n]o interlocutory appeal will be
certified by the trial court or accepted by this Court unless the order of the trial
court decides a substantial issue of material importance that merits appellate
review before a final judgment.”2 Further, “[i]nterlocutory appeals should be
exceptional, not routine, because they disrupt the normal procession of litigation,
cause delay, and can threaten to exhaust scarce party and judicial resource.”3 The
trial court considers the following factors when deciding whether to certify an
interlocutory appeal:
(A) The interlocutory order involves a question of law resolved for the first time in this State; (B) The decisions of the trial courts are conflicting upon the question of law; (C) The question of law relates to the constitutionality, construction, or application of a statute of this State, which has not been, but should be, settled by this Court in advance of an appeal from a final order;
1 See Supr. Ct. R. 42. 2 Supr. Ct. R. 42 (b)(i). 3 Supr. Ct. R. 42 (b)(ii). (D) The interlocutory order has sustained the controverted jurisdiction of the trial court; (E) The interlocutory order has reversed or set aside a prior decision of the trial court, a jury, or a administrative agency from which an appeal was taken to the trial court which has decided a significant issue and a review of the interlocutory order may terminate the litigation, substantially reduce further litigation, or otherwise serve considerations of justice; (F) The interlocutory order has vacated or opened a judgment of the trial court; (G) Review of the interlocutory order may terminate the litigation; or (H) Review of the interlocutory order may serve considerations of justice.4
Only after the trial court considers the above factors “and its own assessment of the
most efficient and just schedule to resolve the case, the trial court should identify
whether and why the likely benefits of the interlocutory review outweigh the
probable costs, such that interlocutory review is in the interests of justice. If the
balance is uncertain, the trial court should refuse to certify the interlocutory
appeal.”5
This Court determines that Plaintiff’s Application should be denied. First,
the Court notes that Plaintiff’s Application is not based on arguments pursuant to
Delaware Supreme Court Rule 42. Rather, the Application argues that the Court
erred as a matter of law, and the Application is void of an analysis on any of the
factors listed under Rule 42(b). Plaintiff’s only argument pursuant to Rule 42 is
4 Supr. Ct. R. 42 (b)(iii). 5 Id. that the issue before the Court is a substantial issue of material importance in this
case, which merits appellate review before a final judgment. Although Plaintiff
failed to address any of the criteria under Rule 42, the Court finds, after its
independent consideration of the factors, that Plaintiff’s Application should be
denied. The Court finds that none of the factors listed in Rule 42 (b)(iii) apply to
the present case. Regarding the first factor listed in Rule 42, Plaintiff’s
Application does not involve a question of law resolved for the first time in this
State. This Application stemmed from Wells Fargo’s Motion to Dismiss. The
Court determined that Plaintiff failed to plead that Wells Fargo owed Plaintiff a
duty under a negligence theory. As the Court stated in the February 28 Order, duty
is determined by the Court because it is “entirely a question of law, to be
determined by reference to the body of statutes, rules, principles and precedents
which make up the law.”6 On a Motion to Dismiss the Court determines whether a
plaintiff may recover under any reasonably conceivable set of circumstances
susceptible of proof under the complaint.7 In making its determination, the Court
must accept all well-pleaded allegations in the complaint as true and draw all
6 Pipher v. Parsell, 930 A.2d 890, 892 (Del. 2007)(citing Fritz v. Yeager, 790 A.2d 469, 471 (Del. 2002). 7 Spence v. Funk, 396 A.2d 967, 968 (Del. 1978); see Cambium Ltd. v. Trilantic Capital Partners III L.P., 2012 WL 172844, at *1 (Del. Jan. 20, 2012) (citing Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, 27 A.3d 531, 537 (Del. 2011)). reasonable factual inferences in favor of the non-moving party.8 The Court agreed
with Wells Fargo, and held that the Plaintiff did not plead any facts that Wells
Fargo was involved in the selection of Mr. Kerrigan. The Complaint contained no
allegations, beyond Plaintiff’s assertion, that Wells Fargo owed Plaintiff a duty
regarding the selection of Mr. Kerrigan. Similarly, the Court found that to the
extent Plaintiff claimed a fiduciary relationship existed, as a matter of law no
fiduciary relationship exists between a debtor and a creditor. The Court cited to a
2007 Superior Court decision, Keith v. Sioris, stating that a creditor/debtor
relationship does not establish a fiduciary relationship.9 Plaintiff asserts that the
Court erred in this determination because this case was merely dicta, and the Court
ignored Plaintiffs argument that Delaware case law is silent on this issue.
Assuming the Court agrees with Plaintiff’s argument that Keith v. Sioris is dicta,
other cases reaffirmed the principle. The Third Circuit in Shahin v. Delaware
Federal Credit Union, noted that “the bank/customer relationship is one of a
creditor to debtor, which does not give rise to a fiduciary relationship.”10 The
Shahin court cites to Tharp v. St. Georges Trust Co., a Delaware Chancery Court
decision which noted that the “relation between a bank and a mere general
depositor of funds is that of debtor and creditor, and is in no sense of a fiduciary 8 Ramunno v. Cawley, 705 A.2d 1029, 1034-36 (Del.1998); Nix v. Sawyer, 466 A.2d 407, 410 (Del. Super. Ct.1983). 9 See Keith v. Sioris, 2007 WL 544039 (Del. Super. Ct. Jan. 10, 2007). 10 Shahin v. Delaware Federal Credit Union, 602 Fed.Appx. 50, 53-54 (3d. Cir. 2015)(emphasis added). nature.”11 The theme behind the determination of these cases is that a fiduciary
relationship does not exist between a debtor and a creditor. Here, the relationship
between the parties is that of a debtor and creditor because the issue relates to a
loan agreement. Thus, as the Court determined in its February 28 Order, Plaintiff
failed to plead that Wells Fargo owed Plaintiff a duty, which is not a question of
law resolved for the first time in this State. Along the same lines, the factors B
through F are not applicable to the present case, nor does Plaintiff make an
argument that these factors apply.12
To address Plaintiff’s claim in the Application, the Court emphasizes that
the Court’s determination in the February 28 Order was not based on facts outside
of the Complaint. Rather, the Court’s determination was centered on Plaintiff’s
failure to state a claim for which relief can be granted. Wells Fargo moved to
dismiss Plaintiff’s Complaint based on Plaintiff’s failure to plead that Wells Fargo
owed Plaintiff a duty under a negligence claim. “Whether a duty exists is entirely
a question of law, to be determined by reference to the body of statutes, rules,
principles and precedents which make up the law; and must be determined by the
court.”13 The discussion of the HUD information was included in the Order to
clarify issues brought up at oral argument and in post oral argument briefing
11 Tharp v. St. Georges Trust Co., 34 A.2d 253, 255 (Del. Ch. 1943)(emphasis added). 12 See Del. Supr. Ct. R. 42(b). 13 Patton v. 24/7 Cable Company, LLC, 2016 WL 6272552, at *2 (Del. Super. Ct. Aug. 31, 2016)(citations omitted). regarding the lender’s duty under a HUD agreement. For the aforementioned
reasons stated above, Plaintiff’s Application for Certification of Interlocutory
Appeal is hereby DENIED.
IT IS SO ORDERED. /s/ Calvin L. Scott The Honorable Calvin L. Scott, Jr.