Philadelphia Indemnity Insurance Co. v. Air Vent v. PowerMax

CourtSuperior Court of Delaware
DecidedJuly 30, 2025
DocketN22C-04-200 SKR
StatusPublished

This text of Philadelphia Indemnity Insurance Co. v. Air Vent v. PowerMax (Philadelphia Indemnity Insurance Co. v. Air Vent v. PowerMax) is published on Counsel Stack Legal Research, covering Superior Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philadelphia Indemnity Insurance Co. v. Air Vent v. PowerMax, (Del. Ct. App. 2025).

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

PHILADELPHIA INDEMNITY ) INSURANCE CO. ) ) Plaintiff, ) ) v. ) C.A. No. N22C-04-200 SKR ) AIR VENT, INC. ) ) Defendant, Third-Party Plaintiff, ) ) v. ) ) POWERMAX ELECTRIC CO. LTD., ) ) Third-Party Defendant. )

Submitted: April 4, 2025 Decided: July 30, 2025

Upon Third-Party Defendant’s Motion to Dismiss GRANTED.

MEMORANDUM OPINION AND ORDER

Christopher Viceconte, Esq., Jennifer M. Rutter, Esq., GIBBONS P.C., Wilmington, Delaware. Craig S. Brodsky, Esq., GOODELL, DEVRIES, LEECH & DANN LLP, Baltimore, Maryland. Attorneys for Defendant and Third-Party Plaintiff Air Vent, Inc.

Julie M. O’Dell, Esq., Robert J. Katzenstein, Esq. SMITH, KATZENSTEIN & JENKINS LLP, Wilmington, Delaware. Thomas M. DeMicco, Esq., WILSON ELSER MOSKOWITZ EDELMAN DICKER LLP, East Meadow, New York. Attorneys for Third- Party Defendant PowerMax Electric Co., Ltd.

RENNIE, J. I. INTRODUCTION

In June 2021, a fire broke out at a residential property, allegedly due to a

malfunction of a vent fan installed in the attic. Plaintiff—an insurance company—

paid a claim to the owner of the property based on an insurance policy that was in

full force and effect at the time of the fire. Plaintiff then brought suit against

Defendant, the manufacturer of the attic fan, alleging various theories of product

liability. Defendant in turn filed a Third-Party Complaint against Third-Party

Defendant—the manufacturer of a motor component contained in the attic fan.

Now before the Court is Third-Party Defendant’s Motion to Dismiss the

Third-Party Complaint for lack of personal jurisdiction. Because the Delaware long-

arm statute does not confer jurisdiction based on the purported “dual jurisdiction” or

“stream of commerce” theory, the Motion is GRANTED.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. THE PARTIES

Third-Party Defendant PowerMax Electric Co., Ltd. (“PowerMax”) is a

company organized and headquartered in China.1 PowerMax manufactures fans and

1 Opening Br. Supp. Specially Appearing 3rd-Party Def.’s Mot. Dismiss (D.I. No. 27) [hereinafter “PowerMax’s OB”] at 5, Ex. A ¶ 6. 1 electric fan motors at its facility in Guangdong, China, and exports those products

overseas, including to the United States. 2

Defendant/Third-Party Plaintiff Air Vent, Inc. (“Air Vent”) is a Delaware

corporation headquartered in Texas.3 Air Vent is engaged in the business of

designing, manufacturing, assembling, testing, inspecting, marketing, distributing,

and selling ventilation fans such as the one at issue in this action.4 From 2003 to

2012, Air Vent purchased over 2 million electric motors from PowerMax to be

included into ventilation fans that Air Vent assembled, manufactured, and sold

throughout the United States. 5

Plaintiff Philadelphia Indemnity Insurance Company (“Philadelphia

Indemnity”) is a Pennsylvania corporation headquartered in Pennsylvania.6

Philadelphia Indemnity provided an insurance policy on the subject property that

was in full force and effect during all relevant periods. 7

2 Def.-3rd-Party Pl.’s Answering Br. Opp’n Specially Appearing 3rd-Party Def.’s Mot. Dismiss (D.I. No. 42) [hereinafter “Air Vent’s AB”] at 4–5, Ex. A (Brad Holland of Air Vent Affidavit) ¶¶ 3–5. 3 Compl. (D.I. No. 1) ¶ 4. 4 Compl. ¶ 4. 5 Air Vent’s AB Ex. A ¶ 3. 6 Compl. ¶ 1. 7 Id. ¶ 2. 2 B. THE UNDERLYING ACTION

This case arises from a fire that occurred on June 7, 2021, at a property located

at 33810 Waterside Drive, Frankford, Delaware.8 The property was owned by

Waterside Property Owners Association, Inc. (“Waterside”) and insured by

Philadelphia Indemnity.9 The fire originated at a fan located in the attic of the

property and caused substantial damages.10 The fan was alleged to be an 18-inch

diameter Electric Gable Vent Fan 1620 CFM that was designed, manufactured,

tested, and sold by Air Vent.11

After the fire, Philadelphia Indemnity duly paid a claim that Waterside made

under the insurance policy on the property, and consequently, Philadelphia

Indemnity became subrogated to the right to recover the loss resulting from the

incident.12 On April 27, 2022, Philadelphia Indemnity filed its Complaint against

Air Vent.13 The Complaint asserts claims of negligence and breach of express and

implied warranties based on alleged defects of the attic fan.14

8 Id. ¶ 2. 9 Id. ¶¶ 7–8. 10 Compl. ¶ 8. 11 Id. ¶ 6. 12 Id. ¶ 3. 13 Compl. (D.I. No. 1). 14 Id. ¶¶ 13–21. 3 C. THE THIRD-PARTY COMPLAINT

On June 23, 2022, Air Vent filed its Answer to the Complaint, and

simultaneously filed a Third-Party Complaint against PowerMax.15 Air Vent alleges

in the Third-Party Complaint that the defective component in the ventilation fan that

caused the fire was a motor that PowerMax designed and manufactured.16 Air Vent

asserts claims of implied indemnification, contribution, contractual indemnification,

breach of contract, and breach of express warranties.17

On December 23, 2022, PowerMax specially appeared and filed a Motion to

Dismiss the Third-Party Complaint for lack of personal jurisdiction under Superior

Court Civil Rule 12(b)(2).18 Both parties filed briefs on the Motion, 19 and the Court

heard argument on May 22, 2023. On August 2, 2023, the Court issued a letter ruling

allowing jurisdictional discovery for the purpose of developing facts “that inform

the Court’s analyses pursuant to the Delaware long-arm ‘dual jurisdiction’ and Due

Process ‘stream of commerce’ doctrines.” 20

15 Answer, Affirmative Defenses, and 3rd-Party Compl. (D.I. No. 12) [hereinafter “3rd-Party Compl.”]. 16 3rd-Party Compl. ¶¶ 9, 65–74. 17 Id. ¶¶ 52–86. 18 Specially Appearing 3rd-Party Def.’s Mot. Dismiss 3rd-Party Compl. (D.I. No. 27). 19 PowerMax’s OB (D.I. No. 27); Air Vent’s AB (D.I. No. 42); Reply Br. Supporting Specially Appearing 3rd-Party Def.’s Mot. Dismiss (D.I. No. 49) [hereinafter “PowerMax’s Reply”]. 20 August 2, 2023 Letter Order (D.I. No. 54). 4 On July 2, 2024, after the jurisdictional discovery concluded, PowerMax filed

a Supplemental Opening Brief in support of its Motion to Dismiss. 21 On August 14,

2024, Air Vent filed its Supplemental Answering Brief in Opposition to PowerMax’s

Motion to Dismiss.22 On October 7, 2024, PowerMax filed its Supplemental Reply

Brief.23 The Court heard oral argument on April 4, 2025.

III. STANDARD OF REVIEW

In considering a motion to dismiss under Superior Court Civil Rule

12(b)(2) for lack of personal jurisdiction, the plaintiff bears the burden to prove a

non-frivolous basis for the Court’s assertion of jurisdiction. 24 The plaintiff satisfies

this burden by “making a prima facie showing that jurisdiction is conferred by

statute.”25 In ruling on a Rule 12(b)(2) motion, the Court must “accept all well-

pleaded factual allegations as true, unless contradicted by affidavit, and draw all

reasonable inferences in favor of the plaintiff.” 26 The facts are interpreted in a light

most favorable to the plaintiff.27

21 Suppl. Opening Br. Supp. Specially Appearing 3rd-Party Def.’s Mot. Dismiss (D.I. No. 62) [hereinafter “PowerMax’s Suppl. OB”]. 22 Suppl. Answering Br. In Opp’n to Specially Appearing 3rd-Party Def.’s Suppl. Br. (D.I. No. 67) [hereinafter “Air Vent’s Suppl. AB”]. 23 Suppl. Reply Br. Supp. Specially Appearing 3rd-Party Def.’s Mot. Dismiss (D.I. No. 72) [hereinafter “PowerMax’s Suppl. Reply”]. 24 Mabey v. Crystalite Bohemia, S.R.O., 2018 WL 775402, at *3 (Del. Super. Feb.

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