IN THE SUPREME COURT OF THE STATE OF DELAWARE
FREDERICK WILLIAMS, § § No. 371, 2020 Plaintiff Below, § Appellant, § Court Below—Superior Court § of the State of Delaware v. § § C.A. No. N20C-06-198 TOLL BROTHERS BUILDERS, § HOCKESSIN CHASE LP, MICHAEL § BROWN, and TIMOTHY J. HOBAN, § § Defendants Below, Appellees. § § Submitted: June 4, 2021 Decided: July 28, 2021
Before VALIHURA, VAUGHN, and TRAYNOR, Justices.
ORDER
After consideration of the briefs and the record on appeal, it appears to the
Court that:
(1) The appellant, Frederick Williams, challenges a decision of the
Superior Court that dismissed his claims against Hockessin Chase, LP and others for
damages arising out of home-construction defects. For the reasons discussed below,
we affirm the Superior Court’s judgment.
(2) Williams purchased a house from Hockessin Chase in 2011. In
December 2017, Williams filed a complaint in the Court of Common Pleas against
Toll Brothers Builders and Michael Brown, alleging that the builder had poorly constructed, and then poorly repaired, the driveway.1 On May 11, 2018, the Court
of Common Pleas dismissed the action, without prejudice, for failure to name and
serve the appropriate defendants.2 Specifically, the appellees’ counsel informed
Williams that Toll Brothers Builders was not a legal entity and that Hockessin Chase,
LP would be the appropriate defendant; the court also provided Williams with
information regarding how to serve an entity defendant.
(3) In 2019, Williams filed a second lawsuit in the Court of Common Pleas,
naming Hockessin Chase, among others, as defendants.3 The complaint sought
damages for construction defects of the driveway, stucco, roof, and other areas of
the home. The defendants moved to dismiss, arguing that the Court of Common
Pleas was not the proper venue, and lacked jurisdiction, because the matter was
subject to arbitration under arbitration clauses in the sales agreement and home
warranty contract. On November 1, 2019, the Court of Common Pleas dismissed
Williams’s complaint, holding that “[p]ursuant to both Section 11 of the purchase
agreement for the sale of the home and Article VII of the warranty agreement, the
1 See Appendix to Answering Brief, at B-63. 2 Id. at B-42-43. In a later action, the appellees took the position that the Court of Common Pleas also dismissed that first action “for, in part, failure to have jurisdiction over Plaintiff’s alleged claims in light of the arbitration clauses within the governing documents.” Williams v. Hockessin Chase, LP, C.A. No. CPU4-19-002007, Motion to Dismiss filed Oct. 11, 2019, ¶ 8 (Del. Ct. Com. Pl.). In our view, the record, including the Court of Common Pleas order dated May 11, 2018 (Appendix to Answering Brief, at B-65) and the transcript of the May 11, 2018 hearing (Appendix to Answering Brief, at B-27-45), does not support the appellees’ assertion that the Court of Common Pleas dismissed the first action based on the arbitration provision. 3 Appendix to Answering Brief, at B-71-73. 2 parties have agreed to resolve any and all claims arising out of the home or home
warranty through binding arbitration.”4 Williams did not appeal, but he filed a
motion that the Court of Common Pleas treated as a motion for reargument and
denied.5
(4) In June 2020, Williams initiated a new suit in Superior Court, again
seeking damages for construction defects of the driveway, stucco, roof, and other
areas of the home. The defendants moved to dismiss, arguing that the complaint was
barred by res judicata and because the dispute was subject to arbitration.6 The
Superior Court granted the motion to dismiss, holding that the Superior Court claims
were barred by the doctrine of claim preclusion because they arose out of the same
operative facts as the complaint that the Court of Common Pleas had previously
dismissed. Williams has appealed to this Court.
(5) The Superior Court correctly determined that Williams’s claims were
precluded by the judgment in the second Court of Common Pleas case. The doctrine
of claim preclusion, or res judicata, forecloses a party from bringing a second suit
based on the same cause of action after a court has entered judgment in a prior suit
involving the same parties.7 The Court of Common Pleas dismissed Williams’s
4 Id. at B-90-91 (citations omitted). 5 Id. at 92-101. 6 Id. at B-57-58. 7 Betts v. Townsends, Inc., 765 A.2d 531, 534 (Del. 2000). See also Dover Hist. Soc’y, Inc. v. City of Dover Planning Comm’n, 902 A.2d 1084, 1092 (Del. 2006) (“Res judicata operates to bar a claim where the following five-part test is satisfied: (1) the original court had jurisdiction over the 3 claims against Hockessin Chase and the other defendants on the grounds that
Williams was required to submit the dispute to binding arbitration, and Williams
neither appealed that decision nor participated in arbitration. The Superior Court did
not err by dismissing Williams’s Superior Court complaint on that basis.
(6) Williams asserts that binding arbitration was not his only available
remedy, pointing to the decision in Wang v. Hockessin Chase L.P.8 In Wang,
homeowners asserted similar construction-defect claims against Hockessin Chase as
the claims that Williams has asserted against Hockessin Chase. The Wang
defendants sought dismissal of the homeowners’ claims, as they did of Williams’s
claims, on the grounds that the sales contract and warranty required the homeowners
to submit the dispute to binding arbitration. The contract and warranty at issue in
Wang appear to include very similar language regarding arbitration as the Williams
contract and warranty. On November 9, 2018, approximately one year before the
Court of Common Pleas determined that Williams was required to submit the dispute
to binding arbitration, the Superior Court in Wang denied the defendants’ motion to
dismiss. The court held that it was “unable to interpret the [sales contract and
warranty] to mean that any action under the Warranty must be resolved by binding
subject matter and the parties; (2) the parties to the original action were the same as those parties, or in privity, in the case at bar; (3) the original cause of action or the issues decided was the same as the case at bar; (4) the issues in the prior action must have been decided adversely to the appellants in the case at bar; and (5) the decree in the prior action was a final decree.”). 8 2018 WL 6046620 (Del. Super. Ct. Nov. 9, 2018). 4 arbitration or that, if another remedy is pursued, the buyer forfeits their rights under
the Warranty”9 and that “other remedies are a plausible means of dispute
resolution.”10
(7) Unfortunately, Williams does not appear to have cited Wang while his
case was pending in the Court of Common Pleas in 2019. And in response to our
request for supplemental briefing concerning Wang—including our specific request
to address whether the appellees or their counsel brought Wang to the attention of
the Court of Common Pleas—the appellees have not indicated that they did so. We
therefore cannot determine from the record before us whether the Court of Common
Pleas was aware of the Wang decision or whether the court’s consideration of Wang
would have changed its decision in Williams’s case. Nevertheless, we conclude that
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IN THE SUPREME COURT OF THE STATE OF DELAWARE
FREDERICK WILLIAMS, § § No. 371, 2020 Plaintiff Below, § Appellant, § Court Below—Superior Court § of the State of Delaware v. § § C.A. No. N20C-06-198 TOLL BROTHERS BUILDERS, § HOCKESSIN CHASE LP, MICHAEL § BROWN, and TIMOTHY J. HOBAN, § § Defendants Below, Appellees. § § Submitted: June 4, 2021 Decided: July 28, 2021
Before VALIHURA, VAUGHN, and TRAYNOR, Justices.
ORDER
After consideration of the briefs and the record on appeal, it appears to the
Court that:
(1) The appellant, Frederick Williams, challenges a decision of the
Superior Court that dismissed his claims against Hockessin Chase, LP and others for
damages arising out of home-construction defects. For the reasons discussed below,
we affirm the Superior Court’s judgment.
(2) Williams purchased a house from Hockessin Chase in 2011. In
December 2017, Williams filed a complaint in the Court of Common Pleas against
Toll Brothers Builders and Michael Brown, alleging that the builder had poorly constructed, and then poorly repaired, the driveway.1 On May 11, 2018, the Court
of Common Pleas dismissed the action, without prejudice, for failure to name and
serve the appropriate defendants.2 Specifically, the appellees’ counsel informed
Williams that Toll Brothers Builders was not a legal entity and that Hockessin Chase,
LP would be the appropriate defendant; the court also provided Williams with
information regarding how to serve an entity defendant.
(3) In 2019, Williams filed a second lawsuit in the Court of Common Pleas,
naming Hockessin Chase, among others, as defendants.3 The complaint sought
damages for construction defects of the driveway, stucco, roof, and other areas of
the home. The defendants moved to dismiss, arguing that the Court of Common
Pleas was not the proper venue, and lacked jurisdiction, because the matter was
subject to arbitration under arbitration clauses in the sales agreement and home
warranty contract. On November 1, 2019, the Court of Common Pleas dismissed
Williams’s complaint, holding that “[p]ursuant to both Section 11 of the purchase
agreement for the sale of the home and Article VII of the warranty agreement, the
1 See Appendix to Answering Brief, at B-63. 2 Id. at B-42-43. In a later action, the appellees took the position that the Court of Common Pleas also dismissed that first action “for, in part, failure to have jurisdiction over Plaintiff’s alleged claims in light of the arbitration clauses within the governing documents.” Williams v. Hockessin Chase, LP, C.A. No. CPU4-19-002007, Motion to Dismiss filed Oct. 11, 2019, ¶ 8 (Del. Ct. Com. Pl.). In our view, the record, including the Court of Common Pleas order dated May 11, 2018 (Appendix to Answering Brief, at B-65) and the transcript of the May 11, 2018 hearing (Appendix to Answering Brief, at B-27-45), does not support the appellees’ assertion that the Court of Common Pleas dismissed the first action based on the arbitration provision. 3 Appendix to Answering Brief, at B-71-73. 2 parties have agreed to resolve any and all claims arising out of the home or home
warranty through binding arbitration.”4 Williams did not appeal, but he filed a
motion that the Court of Common Pleas treated as a motion for reargument and
denied.5
(4) In June 2020, Williams initiated a new suit in Superior Court, again
seeking damages for construction defects of the driveway, stucco, roof, and other
areas of the home. The defendants moved to dismiss, arguing that the complaint was
barred by res judicata and because the dispute was subject to arbitration.6 The
Superior Court granted the motion to dismiss, holding that the Superior Court claims
were barred by the doctrine of claim preclusion because they arose out of the same
operative facts as the complaint that the Court of Common Pleas had previously
dismissed. Williams has appealed to this Court.
(5) The Superior Court correctly determined that Williams’s claims were
precluded by the judgment in the second Court of Common Pleas case. The doctrine
of claim preclusion, or res judicata, forecloses a party from bringing a second suit
based on the same cause of action after a court has entered judgment in a prior suit
involving the same parties.7 The Court of Common Pleas dismissed Williams’s
4 Id. at B-90-91 (citations omitted). 5 Id. at 92-101. 6 Id. at B-57-58. 7 Betts v. Townsends, Inc., 765 A.2d 531, 534 (Del. 2000). See also Dover Hist. Soc’y, Inc. v. City of Dover Planning Comm’n, 902 A.2d 1084, 1092 (Del. 2006) (“Res judicata operates to bar a claim where the following five-part test is satisfied: (1) the original court had jurisdiction over the 3 claims against Hockessin Chase and the other defendants on the grounds that
Williams was required to submit the dispute to binding arbitration, and Williams
neither appealed that decision nor participated in arbitration. The Superior Court did
not err by dismissing Williams’s Superior Court complaint on that basis.
(6) Williams asserts that binding arbitration was not his only available
remedy, pointing to the decision in Wang v. Hockessin Chase L.P.8 In Wang,
homeowners asserted similar construction-defect claims against Hockessin Chase as
the claims that Williams has asserted against Hockessin Chase. The Wang
defendants sought dismissal of the homeowners’ claims, as they did of Williams’s
claims, on the grounds that the sales contract and warranty required the homeowners
to submit the dispute to binding arbitration. The contract and warranty at issue in
Wang appear to include very similar language regarding arbitration as the Williams
contract and warranty. On November 9, 2018, approximately one year before the
Court of Common Pleas determined that Williams was required to submit the dispute
to binding arbitration, the Superior Court in Wang denied the defendants’ motion to
dismiss. The court held that it was “unable to interpret the [sales contract and
warranty] to mean that any action under the Warranty must be resolved by binding
subject matter and the parties; (2) the parties to the original action were the same as those parties, or in privity, in the case at bar; (3) the original cause of action or the issues decided was the same as the case at bar; (4) the issues in the prior action must have been decided adversely to the appellants in the case at bar; and (5) the decree in the prior action was a final decree.”). 8 2018 WL 6046620 (Del. Super. Ct. Nov. 9, 2018). 4 arbitration or that, if another remedy is pursued, the buyer forfeits their rights under
the Warranty”9 and that “other remedies are a plausible means of dispute
resolution.”10
(7) Unfortunately, Williams does not appear to have cited Wang while his
case was pending in the Court of Common Pleas in 2019. And in response to our
request for supplemental briefing concerning Wang—including our specific request
to address whether the appellees or their counsel brought Wang to the attention of
the Court of Common Pleas—the appellees have not indicated that they did so. We
therefore cannot determine from the record before us whether the Court of Common
Pleas was aware of the Wang decision or whether the court’s consideration of Wang
would have changed its decision in Williams’s case. Nevertheless, we conclude that
the judgment in the Court of Common Pleas precluded Williams’s later action in the
Superior Court. If Williams believed that the Court of Common Pleas overlooked
Wang, he should have cited it or pursued reargument or an appeal on that basis.
Indeed, even now, he might possibly seek relief from the Court of Common Pleas
9 Id. at *6. 10 Id. at *5. See also Hockessin Chase, L.P. v. Wang, C.A. No. 2017-0719-TMR, order at 3-4 (Del. Ch. Mar. 4, 2019) (Appendix to Appellees’ Supplemental Brief, at B-200-05) (dismissing Hockessin Chase’s action to confirm an arbitral award, and “agree[ing] with the Superior Court’s reasoning and conclusion” that binding arbitration was not the only remedy available to the Wangs under the contract and warranty). 5 under that court’s Civil Rule 60(b), but we express no opinion on whether relief
would be warranted in the circumstances of this case.11
(8) Although we affirm the Superior Court’s judgment, we are troubled by
the appellees’ counsel’s failure to bring Wang to the attention of the Court of
Common Pleas in the 2019 case, and we take this opportunity to remind the bar of
counsel’s obligation to cite adverse authority. Rule 3.3(a)(2) of the Delaware
Lawyers’ Rules of Professional Conduct provides that a lawyer shall not knowingly
“fail to disclose to the tribunal legal authority in the controlling jurisdiction known
to the lawyer to be directly adverse to the position of the client and not disclosed by
opposing counsel.” Comment 4 to that rule states:
Legal argument based on a knowingly false representation of law constitutes dishonesty toward the tribunal. A lawyer is not required to make a disinterested exposition of the law, but must recognize the existence of pertinent legal authorities. Furthermore, as stated in paragraph (a)(2), an advocate has a duty to disclose directly adverse authority in the controlling jurisdiction that has not been disclosed by the opposing party.
Under Rule 3.3, “an attorney should not ignore potentially dispositive authorities”;
rather, counsel must “cite adverse cases which are ostensibly controlling and then
may argue their merits or inapplicability.”12
11 Cf. Gibson v. Car Zone, 2011 WL 5354270, at *2 (Del. Nov. 8, 2011) (affirming denial of motion under Rule 60(b) where appellant failed to show that opposing counsel had violated Rule 3.3(a)(2) of the Delaware Lawyers’ Rules of Professional Conduct). 12 Mannheim Video, Inc. v. County of Cook, 884 F.2d 1043, 1047 (7th Cir. 1989). 6 (9) In the supplemental briefing, the appellees contend that they and their
counsel were not required to cite Wang when seeking dismissal of Williams’s 2019
Court of Common Pleas complaint because the Wang litigation had not concluded
and could have been overturned on appeal. They cite no authority for the proposition
that counsel has no obligation to cite an adverse decision because it might be
reversed or overturned in the future. This Court has not had occasion to address that
issue; because of our determination that counsel’s failure to cite Wang does not
warrant reversal here, we decline to resolve this issue in the procedural posture of
this case. But we note that courts in other jurisdictions have opined that a lawyer’s
obligation to cite “adverse authority” extends to authorities from the controlling
jurisdiction that are “directly adverse to any proposition of law on which the lawyer
expressly relies” and that “would reasonably be considered important by the judge
sitting on the case.”13 Thus, “a court decision can be ‘directly adverse’ to a lawyer’s
position even though the lawyer reasonably believes that the decision is factually
distinguishable from the current case or the lawyer reasonably believes that, for
some other reason, the court will ultimately conclude that the decision does not
13 Tyler v. State, 47 P.3d 1095, 1104 (Alaska 2001) (quoting Formal Opinion No. 280 of the American Bar Association’s Committee on Professional Ethics and Grievances); In re Greenberg, 104 A.2d 46, 48 (N.J. 1954). See also In re Bowen, 2015 WL 5717439, at *5 (Bankr. E.D. Va. Sept. 29, 2015) (“Under Model Rule 3.3, counsel has a duty not only to cite adverse authority but also must bring to the attention of the deciding court another court’s ruling against the lawyer’s client on the same issue.”); Cicio v. City of New York, 98 A.D.2d 38, 40 (N.Y. App. Div. 1983) (stating that city’s counsel’s failure to cite multiple adverse authorities was “most disturbing and clearly inexcusable” as to two of the adverse cases in which the city was also a party). 7 control the current case.”14 In short, counsel “have an affirmative obligation to
advise the court of adverse authorities, though they are free to urge their
reconsideration.”15
NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior
Court is AFFIRMED.
BY THE COURT:
/s/ James T. Vaughn, Jr. Justice
14 Tyler, 47 P.3d at 1105-06. 15 Cicio, 98 A.D.2d at 40. 8